'EV makers no longer need to be subsidised...': Nitin Gadkari says ask not justified anymore

Union Road Transport and Highways Minister Nitin Gadkari on Thursday said India's electric vehicle (EV) market no longer requires government subsidies, citing the growing demand and reduced costs in the sector. 

“In my opinion, manufacturing of electric vehicles no longer needs to be subsidised by the government,” he said at the Bloomberg NEF summit in New Delhi. 

Gadkari explained that initial costs were high, but as demand has increased, production costs have dropped, making further subsidies unnecessary.

He pointed out that electric vehicles already benefit from favorable taxation, with GST on EVs set at just 5%, providing a significant advantage over petrol and diesel vehicles. 

“The ask for subsidies isn't justified anymore,” Gadkari added.

While discussing the broader shift towards cleaner energy, Gadkari emphasized that India's reliance on fossil fuel imports is a major concern. However, he ruled out imposing additional taxes on petrol and diesel vehicles, focusing instead on expanding EV use, particularly in public transport. 

"Electric buses can play a major role in reducing fossil fuel dependence and pollution levels," he noted.

Gadkari also shared the government’s plans to launch inter-city electric buses soon, which would contribute to the reduction of fossil fuel imports. He acknowledged that while India's fossil fuel economy is vast, the shift to electric vehicles will help mitigate its size over time.

The minister further highlighted India’s rise as the third-largest automobile manufacturer globally and predicted that with increased EV production and local demand, the country could become the largest exporter of lithium-ion batteries within the next five years.

Gadkari concluded by reiterating his commitment to promoting cleaner vehicles in the Indian market. "My intention has always been to encourage Indian automobile companies to focus on manufacturing cleaner vehicles like EVs, not to make operations difficult," he said.