Battery is the most expensive part on an electric car and the government has dropped GST on electric batteries from 28 percent to 12 percent
Pollution is increasing day by day and the majority of it is contributed by cars which is why manufacturers and governments are moving towards greener vehicles like plug-in-hybrid and electric vehicles. The global market is gradually moving towards electric vehicles as more manufacturer are going to introduce EVs in the near future.
Indian government is also moving in the same path. But the government need to take more actions to help the transformation quickly. Battery is the most expensive part on an electric car and the government has dropped GST on electric batteries from 28 percent to 12 percent. This will be a significant move from government as it will directly impact the price of electric cars in India.
Mahindra and Tata Motors are the only companies which manufacturer electric cars in India. The low price of battery will result in lower production cost for the manufacturer. The batteries for electric cars are not manufactured in India as they are imported from USA or China. The concept of swapping batteries is also expected to be more popular in coming years.
The cost of electric batteries are calculated by ‘$ per kWh’ unit. In 2010, the cost per kWh of electric batteries were at $1000 but over the years the cost has come down, right now the cost is between $225-$250 which is high. By 2026 this cost is expected to come down to $100 as per the study conducted by Bloomberg.
One of the reasons for high price is that electric cars batteries are still not main stream yet. When demand increases, it will eventually lower the cost. Along with batteries, the government is also expected to reduce tax on electric cars but the CBU tax for EVs is not yet reduced as it is the same like regular combustion cars.
German manufacturers requested the government to take a decision on this as it will significantly give more confidence for manufacturers to bring EVs. Government is also planning to scrap permits to run commercial electric vehicles to improve its popularity. The new proposal also includes introduction of Green number plates to make them stand out from regular cars.