Society of Indian Automobile Manufacturers (SIAM) today welcomed the government’s decision to incentivise production of electric vehicles and said steps like this will encourage development of alternate fuel technologies in the country.

“The industry is encouraged by the initiative taken by the Ministry of New and Renewable Energy... The extension of the existing scheme to cover all categories of Indian individuals and institutional users would go a long way in encouraging development of such vehicle technology in India,” SIAM President Pawan Goenka said in a statement.

The government has recently announced a Rs 95 crore incentive package to the electric vehicle (EV) manufacturers for each such vehicle sold in India during the remaining part of the 11th Plan, which is 2010-11 and 2011-12.

“We hope that this support would continue even as part of the 12th five-year Plan of the government since this is a ’technology leap’ programme and would require support for an extended period,” he added.

Goenka said the industry also appreciated the move to encourage indigenous development as against only imports by introducing the requirement of minimum 30 per cent local component usage in these vehicles to avail the incentives.

Earlier the Society of Manufacturers of Electric Vehicles (SMEV) had said that it expected electric two-wheeler market to witness 100 per cent growth following the incentives. At present, the Indian electric two-wheeler market stands at about 85,000 units annually.

The EV promotion scheme, effective November 11, envisages incentives of up to 20 per cent on the ex-factory prices of the vehicles, subject to a maximum limit.

The cap on the incentive will be Rs 4,000 for low speed electric two-wheelers, Rs 5,000 for high speed electric two-wheelers, Rs 60,000 for seven seater three-wheeler and Rs one lakh for an electric car.

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