Union Minister Nitin Gadkari stated that electric vehicles (EVs) can maintain costs without subsidies due to decreasing lithium-ion battery prices but won't oppose incentives if the finance and heavy industries ministries decide to offer them
With falling lithium-ion battery prices, electric vehicles can now maintain cost without subsidies but it is for the finance and heavy industries ministries to decide if incentives need to be given to electric vehicles, Union Minister Nitin Gadkari said on Monday.
Speaking at the annual session of Automotive Components Manufacturers Association (ACMA), Gadkari, the Minister for Road Transport and Highways, said within two years, the cost of EVs will be the same with their petrol and diesel counterparts.
"First of all, I am not against any subsidies. I don't have any problem," Gadkari said when asked if more incentives were needed to accelerate electric mobility as adoption in India has not been as expected.
Elaborating his views, he said at one point the price of the lithium ion battery was $ 150 per kilowatt hour. Now it is something $ 108 to 110 per kilowatt hour.
"I am confident it will come to $ 100," he asserted.
Moreover, he said the manufacturing of EVs has witnessed an increase in volume terms.
"My assessment was that without subsidy, you can maintain that cost (of EVs) because the cost of production is less," Gadkari said.
He further said, "I feel that within two years, the cost of the petrol vehicle and the diesel vehicle will be the same as electric, because already there is savings on electric vehicles."
On the issue of extending incentives to EVs, Gadkari said still if the finance minister and the heavy industries minister, if they want to give subsidies it will be beneficial for the automotive industry.
"I don't have any problem. I will not oppose that," he asserted.
The minister also expressed confidence that India can become the number one automotive manufacturing hub in the world saying that the future of this industry is very bright.
"My feeling is that we should make India as the number one automobile manufacturing hub in the world," he said, adding factors such as advancement in technology, availability of affordable talented workforce and the Indian auto industry's good reputation globally worked in its favour.
Asked if government incentives were needed to accelerate old vehicle scrappage, Gadkari said it would not be required as market forces will make auto companies take steps on their own to woo consumers.