Govt likely to reintroduce subsidy on lithium batteryhttps://indianexpress.com/article/business/business-others/govt-likely-to-reintroduce-subsidy-on-lithium-battery/

Govt likely to reintroduce subsidy on lithium battery

The government is planning a subsidy of R32,000 on each lithium battery kit.

By: Shruti Srivastava & Sharmistha Mukherjee

The government is planning a subsidy of Rs 32,000 on every lithium battery kit to promote greater usage of electric bikes and cut down vehicular pollution.

Anticipating a mention of the scheme in the Budget, manufacturers have readied blueprints for pilot projects.

While Hero Electric is in talks with the Delhi government and the Delhi Metro Rail Corporation (DMRC) to station 20 e-bikes at every metro station, Coimbatore-based Ampere Vehicles has tied up with Domino’s Pizza in Delhi to provide 50 lithium-battery fitted e-bikes for delivery to map consumer interest.

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An official told The Indian Express that the government is also planning to publish advertisements inviting a partnership with private players in launching pilot projects.

The official added that while the expenditure finance committee has given a go-ahead to a Rs 800-crore subsidy proposal for the sector, the ministry of road transport and highways is yet to give clearance. “There are some specific issues which are being discussed with the road transport ministry. We should get it soon after which we will finalise the pilot projects,” the official said.

The proposal for the subsidy becomes important in wake of the worrisome figures of the sales of electric two-wheelers, which are set to hit a four year low of 16,000 units in 2014-15, compared to one lakh units just two years ago, according to industry estimates.

To promote the e-vehicles, the government has identified six centres including Agra, Delhi, Haridwar, Bangalore and Hyderabad for pilot projects.

“Hero Electric is in talks with the DMRC. A commuter registered with the DMRC will be able to hire them by using a cashless card,” said Sohinder Gill, chief executive of Hero Electric and director of Society of Manufacturers of Electric Vehicles.

Similarly, Ampere will provide the e-bikes to Dominos to generate and gauge customer interest. “With the subsidy support, these vehicles will become affordable,” said Hemalatha Annamalai, founder and CEO, Ampere Vehicles. Without the subsidy, the bikes cost between Rs 80,000-90,000 compared to a lead-acid battery vehicle, which costs around Rs 55,000-60,000, added Annamalai.

The National Electric Mobility Mission Plan provided for a subsidy of Rs 22,000 for a lithium battery pack, but was withdrawn in 2012, leading to a steep fall in the sales of electric two-wheelers.