Govt asks car manufacturers to raise fuel efficiency by 30%, promote hybrid/electric motors

In a bid to induce automakers to shift from manufacturing traditional cars to electric vehicles, the government has proposed to tighten fuel efficiency norms. A panel, headed by Road Transport Secretary Y S Malik, has presented a 15 point plan of action to aid car manufacturers to switch from Internal Combustion Engines (IECs) to Electric Vehicles (EVs). The report has been forwarded to the NITI Aayog, and is still under deliberation.

In its report, the panel proposed,”To have approximate induction of 3 to 5% EVs, as against total manufactured vehicles, the fuel efficiency norms have to be lower by 20-25 percent over FY 2017-18 data. This approach has to be adopted for cars, three-wheeler, and two-wheeler industry.” Earlier in the year, the Ministry of Transport had mandated car manufacturers to produce vehicles that are 30 per cent more fuel efficient by 2022. This is expected to help India meet the global CO2 emission norms, and likewise assist in reducing its carbon footprint.

In order to incentivise electric car manufacturing, the panel seeks to provide tax deductions for scientific research, and inhibit imports to protect and promote domestic manufacturing. Additionally, manufacturers have been requested to keep their profit margins low for the first five years, given the soaring costs of e-vehicles. Disbursement of low interest loans has also been suggested for buying EVs for public transport services.

The Indian Space Research Organization (ISRO) has, on parallel lines, called upon industry leaders to make bids to avail its indigenously developed Lithium-Ion Cell Technology. While speaking with the Times of India, ISRO chief, K Sivan, had indicated that the organization had developed four Lithium-Ion Cells; and has permitted the Automotive Research Association of India to use 50Ah and 100Ah cells for developing prototypes of an e-scooter and an e-car.

Simultaneously, talks are underway for introducing policies on installation of EV charging infrastructure in buildings, parking spaces, and freeways. The government is also planning to allow manufacturers to use their Corporate Social Responsibility (CSR) funds for setting up support systems for e-vehicles.

Industry experts have put forward mixed responses on the new policies. Some have welcomed the step, while others have expressed sharp displeasure, and indicated that the move would force manufacturers to make diesel and petrol vehicles more expensive. An industry official, while speaking with CNBC-TV18, said,”We are busy transitioning from BS-IV to BS-VI. All technical resources are geared up for this. To throw in more challenges at this stage would be completely unfair. Such a move could impact auto companies, the components industry, and also the economy.” businesstoday

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