Government Likely To Go Easy On Electric Vehicle Push
The proposal to ban small-capacity petrol-powered two-wheelers by 2025 might be relaxed a bit
- The government has been pushing electric vehicles aggressively with a proposal to ban small-capacity petrol-powered two-wheelers by 2025.
- Certain government policies have affected the current auto sector, leading to decline in vehicle sales.
- To counter the slump in automotive sales, select government policies favouring electric two-wheelers might take a back seat.
The auto industry is witnessing an unprecedented downfall this year. In fact, the decline in sales has forced major automakers to cut down on the production of its vehicles. Auto industry bigwigs have raised this issue in a meeting with government officials. They attributed part of the decline to the Indian government's regressive policies on internal combustion (IC) powered vehicles in order to promote the growth of electric vehicles.
One such proposal is to ban sales of IC-powered 2-wheelers under 150cc by the year 2025. Auto manufacturers have a low timeframe to switch from BS4 to BS6 and then to switch to electric vehicles. Also petrol-powered vehicles below 150cc account for a majority of two-wheeler sales and profits. So this is turning out to be a bleak scenario for auto manufacturers and by a domino effect, auto parts suppliers and dealerships as well.
Given that the auto sector is a major contributor to the country’s GDP and one of the biggest sources of employment, government insiders indicate that the government is working on measures to soften the blow to automakers. For this, some initiatives to curb sales of IC-engined two-wheelers like the proposal to significantly increase registration charges for IC-powered vehicles could be amended.
The Indian government policies have had internal-combustion powered vehicles attract 28 percent GST, high registration charges and increased insurance costs. In addition, government safety norms like mandatory CBS and ABS in two-wheelers have increased the base retail price as well. Rising prices of vehicles also a part of the reason for the decline in vehicle sales. And the prices are set to get even higher with the proposed increase in registration by upto 1900 percent and upcoming BS6 emission norms effective April 2020 onwards.
Now it seems the government is planning measures to pacify the industry giants. According to reports, the push on electric mobility is likely to take a back seat. Some policies like the proposed increase in registration could be put on hold. A part of the government faction believes that the electric push can not be done with the idea of bulldozing the existing automotive industry. We might even see the deadline for banning small capacity IC 2-wheelers being pushed forward to allow auto manufacturers a breather of sorts.