End of the road for EV subsidies? Here’s what Nitin Gadkari said

In what could hint at a death knell for subsidies on electric vehicles, Minister of Minister of Road, Transport and Highways Nitin Gadkari has said the electric vehicle industry is in good shape with rising domestic as well as global demand, and does not require further support from the government.

“I feel we do not need subsidy. In the beginning the cost was very high and we needed to encourage the people. So, the best way was that. Now, today the demand is increasing, volume has increased, cost is reducing,” Gadkari said today.

Gadkari added that the cost advantage in operating electric vehicles was enough incentive for customers. “Now I do not need to convince you to purchase an electric car. If you are spending Rs 30,000 every month. By purchasing an electric car, your average will be Rs 3,000-4,000. And there is no maintenance cost,” he claimed. Gadkari also said that while GST on petrol and diesel vehicles was 48 per cent, it was just 5 per cent on electric vehicles, offering them a major advantage.

The comments come just a couple of days after Heavy Industries Minister HD Kumaraswamy said work on the next phase of Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) scheme was in the final stage and would be in place in the next couple of months.

The government has over the last few years been incentivising the electric vehicles sector through many policies and schemes, including the FAME. The second leg of the scheme, FAME-II, ended in March 2023.