Government likely to roll out electric car subsidy by April

The Ministry of Industries is likely to roll out the subsidy for electric cars under the National Electric Mobility Mission Plan by April next year. It had been introduced earlier this year by Prime Minister Manmohan Singh but was ultimately put in limbo due to adverse economic conditions. 

Speaking on the sidelines of the fourth annual SIAM diesel convention in Mumbai, Ambuj Sharma, additional secretary, Ministry of Heavy Industries told the Economic Times that the main impediment in rolling out the subsidy was that the government was short on funds.

He said that the government was looking at a total of Rs 12,000 crore over the next seven years with an average of Rs 2,000 crore and is currently working with the finance ministry to see if it could tie up to fund the incentives. However, he hinted that the first two years would be a little low in terms of amount but would increase once the economy picked up.

Sharma said that the government was looking at the total cost of the ownership model to give incentives to car buyers and that if the electric vehicles markets took off, it would save Rs 40,000 crore worth of fuel annually.

The biggest player in the electric cars market is currently Mahindra Reva who has a Greenfield Facility outside Bengaluru where they manufacture the e2o. The car is expected to be joined by hybrid models from Tata and Maruti Suzuki.