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GST Rate Cut To Boost EV Sales

July 29,2019

The GST rate cut announcement, on the electric vehicles, which would be applicable from Aug-19, has been received well by the auto industry. The rate cut would result in the lowering of retail prices of electric 2-wheelers and cars. The rate cuts are in line with government resolve to make India an EV hub of the world.

The result of the rate cut would enable Hyundai to reduce the rate by 1.5 lakhs on its electric SUV Kona which currently is priced at 25+ lakhs. As per MD & CEO, Hyundai India, this move of reducing GST on EV would boost the sector growth and would lead to faster adoption of EV in India.

Mahindra plans to reduce the price of its eVerito mini sedan by 60K to 70K. The 2-wheeler segment is also upbeat and Ather Energy an electric 2-wheeler startup has said that they would reduce cost by 6K to 8K. They are confident that this would make electric 2-wheeler more affordable and would increase the demand of EVs leading to faster adoption in the country.

In spite of all these government’s push on electric vehicle segment, the volumes have not really picked up. The government 10,000 cr FAME 2 (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) program, aimed at faster adoption of electric vehicles, has been facing challenges due to lack of charging infrastructure and high acquisition cost. The EV sales have been in a few thousand in the passenger segment compared to 33 lakh units sold in fossil fuel-driven vehicles. Similarly, the sales of Electric 2-wheelers has also remained subdued.

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Autojobs4ublog Team