India’s cabinet has approved a scheme to spend $1.4 billion to subsidize sales of electric and hybrid vehicles as part of efforts to curb pollution and reduce dependency on fossil fuels.
Government of India has approved the scheme, known as Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME).
Under this scheme of FAME, subsidies would be offered based on the battery capacity of the vehicle, ranging from buses and cars to three-wheelers and motorbikes.
The incentives of this scheme (FAME) would be applicable only on vehicles costing less than 1.5 million Indian rupees ($21,177).
The benefits of the incentives will be extended to only those vehicles fitted with advanced batteries using lithium ion or other new technologies, the government said.
India is world’s fastest growing car-market but the sales of electric and hybrid vehicles is negligible.
Government of India had set a target in 2017 for all new vehicles to be electric by 2030. The critics had criticised that the high cost of batteries and lack of charging points across India were major obstacles.
India will spend 100 billion rupees ($1.4 billion) over three years on incentives, the government said.
The subsidies would amount to 10,000 rupees for each kilowatt hour (kWh) of battery capacity in a vehicle, amounting to about 50 percent of the battery cost.
As of now average cost of electric car in India is about 10 lakhs, which have a battery capacity upto 20Kwh. So the discount which customers will get under this scheme would be around 2,00,000.
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