I am not against incentives on EVs, but its not my call: Nitin Gadkari

Within two years, the cost of an EV will be the same as petrol and diesel vehicles. They don't need subsidies as there already is an advantage with electric as a fuel, he says

Days after saying that there is no need for subsidies to achieve greater penetration of electric vehicles (EVs), Union Minister of Road Transport and Highways Nitin Gadkari on Monday clarified that the view is his own, but any official call on EV subsidies is not one that he can take.

“I am not against any incentives. The heavy industries minister is responsible for this, and if he wants to give more incentives to EVs, I do not have any problem. My argument is that when EVs started, the price of a lithium-ion battery was $150 per kilowatt-hour. Now, it is around $108-110, and I’m confident that it will come down to $100. Based on that, I assessed that even without a subsidy, one can maintain their costs because the production expenses have come down,” the minister said at the 64th annual session of the Automotive Component Manufacturers Association of India.

 

“Within two years, the cost of an EV will be the same as petrol and diesel vehicles. They don’t need subsidies as there already is an advantage with electricity as a fuel. Still, if the finance minister and heavy industries minister feel that more subsidies are beneficial, I do not oppose that,” he added.

EV penetration in the country is around 2 per cent for passenger vehicles and 6 per cent across vehicle classes.

Gadkari, who has also been a staunch critic of the fossil fuel economy, clarified his stance on the issue as well, but he maintained that growing fossil fuel consumption is a problem for him.

“Firstly, I’m not against petrol, diesel, or fossil fuels; my statements are sometimes misinterpreted. But we have a Rs 22 trillion bill for imports of fossil fuels — is that not a challenge for the country? Forty per cent of the air pollution in the country is due to the transport sector, and I am the minister who is responsible for that. Is that good?” the minister asked.

“I am not against anybody, but there is economic viability and a good market (in biofuels). Then why do you insist on petrol and diesel?” he added.

On a question about the extent of discounts offered on new vehicles by automotive sellers on scrapping old vehicles, the minister said that the industry can do more.

“I don't need to make any request to anybody because everyone wants to capture the market and there is competition. For that, there is no option — they have to increase the discount whether they like it or not. These are intelligent people; they understand business — which is why they will increase their discounts,” he said.

He compared the present scrappage scenario with the initial days of airlines, where competing airlines introduced major discounts that ultimately benefited the consumer.

Recently, the minister said that manufacturers have agreed to offer discounts of 1.5-3 per cent, or up to Rs 25,000, on new vehicle purchases against scrapped old vehicles.