Auto Budget 2019 was a big blow to the huge expectations of the entire auto industry. It has stand up to the expectancy of a particular niche who caters to electric vehicles by introducing some positive and motivated steps towards prioritizing the electric vehicles in India.
Earlier, the government of India announced that there will be a budget of Rs 10 K crore for Faster Adoption and Manufacturing of Hybrid and Electric Vehicles under the Phase II of FAME scheme for three years. And addition to this, they have now come up with the EV boost by bringing some significant hits.
In addition to this, Honb. Minister of Road Transport and Highways Shri Nitin Gadkari Ji has confirmed recently that the Government of India is not against the petrol and diesel based industry, but they are encouraging the electric vehicles or any alternate technology that will be much cheaper and also pollution-free; and ask the market to take the decision and make a choice.
The key highlights of EV Budget 2019 were:
- Reduction of GST
The Government of India has asked the GST Council to cut Goods and Service Tax (GST) on electric vehicles from 12% to 5%.
- Wave off Custom Duty
For some selected parts of electric vehicles like charging guns, EV e-drive, etc., the Government has decided to wave off the custom duty, till local manufacturing is running and flourishing.
- Tax Rebates
A buyer of electric vehicles will get up to Rs. 1.5 lakh on interest paid on car loan and a total exemption of Rs. 2.5 lakhs over the entire loan period (Loan taken on or before 31st March 2023).
- Additional Taxes on Petrol and Diesel
The new budget has levied an additional tax on every liter of petrol and diesel. One rupee as excise duty and one rupee as road and infrastructure cess will be charged on each liter.
Cost Effectiveness of Using Electric Vehicles
Electric vehicles have environmental benefits such as checks air pollution, utilizes renewable energy and uses biodegradable materials, as well as it proves to be cost effective. If you compare a petrol vehicle with an electric vehicle, you will be able to understand that EV is 84% more cost-effective as compared to a petrol vehicle.
|
Factors |
Petrol Scooter |
Electric Scooter |
|
Years |
5 years |
5 years |
|
Kms |
40000 Kms |
40000 Kms |
|
Consume |
800 liters of Petrol @ 50 Kmpl |
80 Kms per charge and consume 2 units per Km = Rs. 1000 |
|
Cost of per unit |
Rs. 80 per liter |
Rs. 7 per unit |
|
Cost |
Rs. 64,000 |
Rs. 7000 |
|
5 Years Maintenance and Servicing Cost |
Rs. 25,000 (approx.) |
Rs. 7,500 (approx.)
|
|
Total Cost of Ownership |
Rs. 89,000 + loan interest (if loan is taken) |
Rs. 14,500 + loan interest (if loan is taken) |
|
Extra Cost |
_ |
If battery is changed, Rs. 12,000 + Rs. 14,500 + loan interest = Rs. 26,500 (Change of battery is required after 5-6 years) |
|
Factors |
Petrol Car |
Electric Car |
|
Years |
5 years |
5 years |
|
Kms |
50000 Kms |
50000 Kms |
|
Consume |
4166 liters of Petrol @ 12 Kmpl
|
100 Kms per charge and consume 10 units per Km = Rs. 5000
|
|
Cost per unit |
Rs. 80 per liter |
Rs. 7 per unit |
|
Cost |
Rs. 333,333 |
Rs. 35,000 |
|
5 Years Maintenance and Servicing Cost |
Rs. 50,000 (approx.) |
Rs. 25,000 (approx.)
|
|
Total Cost of Ownership |
Rs. 383,333 + loan interest (if loan is taken) |
Rs. 60,000 + loan interest (if loan is taken) |
|
Extra Cost |
_ |
If battery is changed, Rs. 12,000 + Rs. 60,000 + loan interest = Rs. 72,000 (Change of battery is required after 8 years) |
EV is still a mini-scale part of the auto industry and to boost the enthusiasm of the auto players and channelize them towards expanding the electric space, these measures have been taken. Nirmala Sitharaman, our Finance Minister, has boldly announced to “aim to see India as the global hub of manufacturing of electric vehicles”.