Union Minister Nitin Gadkari stated on Thursday that there is no longer a need to provide subsidies for the electric vehicle (EV) market, as consumers are now independently opting for EVs or CNG vehicles. Speaking at the BNEF Summit, Nitin Gadkari highlighted that while the initial manufacturing costs of electric vehicles were high, increased demand has led to a reduction in production costs, rendering additional subsidies unnecessary.
According to a report of PTI, “Consumers are now choosing electric and compressed natural gas (CNG) vehicles on their own and I do not think we need to provide much subsidy for electric vehicles,” the road transport and highways minister said.
The minister noted that the GST on electric vehicles is lower compared to petrol and diesel vehicles. He added, "In my view, there is no longer a need for the government to subsidize the manufacturing of electric vehicles." “The ask for subsidies isn’t justified anymore,” he said.
Currently, a 28 percent GST is imposed on vehicles powered by internal combustion engines, including hybrids, while electric vehicles are taxed at a reduced rate of 5 percent. On Wednesday, Union Heavy Industries Minister H.D. Kumaraswamy mentioned that the government is likely to finalize the third phase of its flagship electric mobility adoption scheme, FAME, within the next month or two.