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INDIA: Manufacturing Hybrid / Electric vehicles will Reduce its Price

The secretary for Ministry of Heavy Industries and Public Enterprises, Girish Shankar, has come up with a solution to reduce the high prices of full electric and hybrid vehicles in India. Addressing a gathering at the National Workshop and Exhibition of FAME India, the government official said, “ The biggest challenge is cost and all of us would have to work on it so that people can afford and easily adopt this new technology. To make it cheaper, we would have to work for Make-in-India and (that) is the solution for making electric vehicle affordable.”

He is of the view that manufacturing components and such vehicles (hybrid/electric) in India will significantly reduce costs and lower the price of such vehicles. The initial price of hybrid /electric vehicles is one of the reasons why such vehicles haven’t managed to sell in many numbers.

The official also urged the Automotive Component Manufacturers Association of India (ACMA) to get involved and play a role in manufacturing the required components for such vehicles.

His emphasis was on the government’s Make in India program that urges manufacturers to utilise the country’s cost effective solutions to manufacture a product. This in turn would reduce the selling price of such vehicles and make it more affordable.

FAME (Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India) is part of the National Electric Mobility Mission Plan. It was announced last year and focuses on quick and widespread adoption of hybrid / electric vehicles in India. Out of an approved Rs 795 crores, Rs 500 crore is earmarked for demand incentives alone. Rest of the funding will be spent on other aspects such as developing charging station infrastructure, pilot projects, technology platforms and so on. The Ministry of Heavy Industries is seeking a funding of Rs.14,000 crore for the scheme.

The FAME scheme, currently, provides incentives on purchase of hybrid or electric vehicles (cars, trucks, buses, two-wheelers). These are in the form of lower cost of purchase. Somewhat like a discount. The manufacturers then claim the discounted amount from the government at the end of each month.

Currently Mahindra sells the all electric e2O and the e-Verito, while Toyota has the Camry Hybrid and Prius on sale in India. BMW also sells the i8 in India. Maruti Suzuki launched the Ciaz and Ertiga with the SHVS (Smart Hybrid Vehicle System) technology that has been doing pretty well. When launched, the Ciaz SHVS was priced lower than the diesel powered variant (as a result of incentives offered by the FAME scheme).

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