As an alternative to the reduced engine options, many OEMs are shifting towards the development of electric and hybrid powertrains.
With the upcoming BSVI emission norms and the consequent haste of major automobile manufacturers to make their products BSVI-compliant, the overall price range of vehicles in India has increased. Original Equipment Manufacturers (OEMs) have opted to discontinue the manufacturing and sale of some of its engine options, which primarily includes diesel powertrains.
As an alternative to the reduced engine options, many OEMs are shifting towards the development of electric and hybrid powertrains. While hybrid vehicles have been on offer in the Indian and the international markets for the last few years, fully electric vehicles are fast becoming the trendsetters in the country. Though Tesla was among the pioneering manufacturers to offer fully electric, performance-oriented vehicles, other industry giants such as Porsche, Audi and BMW have entered the competition.
Electric vehicles (EVs) were first introduced in India as a novelty by manufacturers like Mahindra. However, in recent times EVs have taken a more serious form, with the likes of Hyundai Kona, MG ZS EV and Tata Tigor EV being available for personal purchase. This has allowed civilians to experience EVs first-hand, allowing them to make a choice between a conventional internal combustion engine (ICE) vehicles and EVs.
Usually, a customer opts for an EV as a cheaper and cost-effective alternative to conventional vehicles. These vehicles are equipped with massive battery packs which generate power for the entire vehicle eliminating the need for fossil fuel such as petrol and diesel, while also eliminating emissions and carbon deposits.
As a token of encouragement for the purchase and promotion of electric vehicles, the Indian government is offering an additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles. The government has proposed section 80EEB, for the deduction to individual taxpayers with respect to interest on loan taken for the purchase of an electric vehicle. As per a report in Livemint, Rachit Chawla, founder and CEO of Finway states, "It will encourage automobile companies to manufacture more electric vehicles as this additional tax deduction introduced may spur the demand for electric vehicles."
The Government has implemented the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles, or FAME 2 scheme. It offers incentives for electric buses, three-wheelers and four-wheelers to be used commercially. It also encourages the setting up of charging stations for an electric vehicle in India. OEMs are also offered incentives to make their vehicles more affordable and accessible to the masses.
Not only four-wheelers, but Indian startups have also gained prominence with the launch of fully electric two-wheelers. These include Pune-based Revolt Motors, Bengaluru-based Ather motors, etc. These differ from electric four-wheelers as most of them have replaceable and removable batteries which reduce the need to keep the vehicle on standby while charging. However, they cannot accommodate as big a battery pack as four-wheelers, due to which two-wheelers have a lower range on a full charge than four-wheelers.Hence, the electric vehicle segment in India is gaining momentum and is expected to pose a serious competition to conventional ICE vehicles in the coming years.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.