The 4 factories that could solve one of the last pieces of India’s EV puzzle

India, famous because of its cheap entry-level automobiles, remains the only major market without a genuine electric automobile. The market share of electric cars in the country stands in a mere 0.06%, compared with more than 30% in several of developed nations, government figures show.But that may soon change — the country’s plans to go large on electric vehicles may now have finally been placed on the quick lane.According to latest reports, Modi government is finalising plans to invest $4 billion to establishing four large battery-manufacturing factories. The shapes of this big-ticket plan are being given the last touches and a Cabinet note on the matter has already been floated, the Mint paper quoted a senior official as saying.For the ambitious project helmed by Niti Aayog, India is seeking to take a leaf out of Tesla’s novels. The plan entails establishing at four factories — of 10 gigawatt hours each — on the lines of that which Tesla has achieved with its Nevada (US) Gigafactory.Tesla boss Elon Musk set the foundation of a Shanghai Gigafactory — the first-ever outside US — in January this year. According Niti Aayog, India will need six these giga facilities by 2025, which will go up from 2030. One gigawatt hour of battery power can electricity 10 lakh houses for an hour and approximately 30,000 electric cars.These factories, even when they start functioning, could solve a few of the final pieces of India’s electric mystery by providing the ecosystem for e-cars to finally begin moving, analysts say.Green road mapIndia’s huge dependence on fossil fuels like gas and diesel is the main reason for increasing greenhouse gas emissions and shocking contamination levels. That is the principal reason behind the government’s focus on vehicles, as a transition into e-cars is very likely to reduce toxic air pollutants markedly.Modi government has a stated commitment to reduce air pollution by doubling back on electric vehicles. The road map envisages all automobiles offered after 2030 being electric. Niti wants all sub-150cc two-wheelers offered in India after March 31, 2025, to be electric. To get three-wheelers, the deadline is March 31, 2023. The new strategy also assumes significance in view of increasing tensions in the Gulf area, where a conflict could cause an oil price spike, even landing a telling blow on India’s fiscal numbers. As India imports over 80 percent of its petroleum needs and about 18 percent of its natural gas, its vulnerability to petroleum fluctuations is especially conspicuous.Electric vehicles won’t be the only sector to benefit after these factories finally produce It’s also very likely to boost the country’s electric grids and customers electronics industry — sectors that frequently confront difficulties on the clean energy front due to the sporadic and irregular character of solar and wind energy distribution in India.India is among the nations in the forefront of renewable energy efforts. It currently has 80 gigawatt renewable energy capability also has ambitious plans for its future in store — the strategy is to achieve 175GW from 2022 and 500GW from 2030. The blueprintIn perspective of this stop-start character of India’s electric journey, a slew of incentives are being proposed to woo manufactuers, the Mint story reported. Included in these are (a) a 3% forex hedge on overseas loans, (b) a fixed 3 percent interest subvention on rupee loans, (c) probably reduction in MAT. The incentives may also incorporate a deemed infra standing and an investment-linked tax relief, besides some basic customs protects, it said.In the 2019 Budget, Nirmala Sitharaman had declared tax breaks for setting up manufacturing units for solar photovoltaic cells, lithium ion storage batteries and solar charging infrastructure.Besides, the government also has plans to offer tax credits to international buyers as also grants at the country level, the Mint story said.GST increase at lastMeanwhile, Modi government has delivered large on its green pledge by clipping GST on cleaner automobiles from 12 percent on the lowest slab of 5 percent. Following this cut, e-cars will be more affordable by between Rs 60,000 and Rs 1.5 lakh. Costs of two-wheelers can come down by up to Rs 8,000. The GST Council also decreased the rate on e-vehicle chargers from 18% to 5 percent. These movements are part of this government’s efforts to discourage more and more individuals from buying petrol and petrol cars.The newest GST cut will widen the tax difference between petrol/diesel automobiles and e-cars. The foundation GST on standard ICE automobiles is 28%, and buyers also have to shell out extra cess dependent on the automobile size and engine power over and above the GST rate.

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