The Ministry of Road Transport and Highways has started working on a draft notification proposing the sale of only electric three-wheelers from April 2023 and sale of only electric two-wheelers under 150cc from April 2025 onwards, government sources told CNBC-TV18.
The move, aimed to curb pollution, comes after the central government's think-tank submitted a proposal suggesting a complete switch to electric two-, and three-wheelers in a phased manner from 2023-24 onwards.
"The work on draft notification has started. Once the necessary approvals are sought and formalities are completed, this will be put out for stakeholder consultation in the next 7-10 days," said one of the people aware of the development.
During 2018-19 (April-March), total two-wheeler sales in India stood at 2.1 crore units, registering a growth of nearly 5 percent year-on-year, as per official figures from the Society of Indian Automobile Manufacturers (SIAM). Three-wheeler sales stood at around 7 lakh units in the last financial year, posting a growth of 10 percent on year, as per the SIAM data.
Now, that the numbers are in place, industry experts say that a move in this direction would need a serious overhaul of the production and sales strategy for automobile manufacturers as over 80 percent of two-wheeler sales come from the under 150cc category and more importantly, electric two-wheelers comprise less than 1 percent of total domestic two-wheeler sales in the country. As far as the three-wheelers are concerned, cost structure and range anxiety will be the main challenges to overcome as it is primarily used for commercial purpose.
The government has first targeted the two categories as studies suggest that these two contribute to the most number of vehicles that ply on Indian roads. A NITI Aayog research, based on six years of sales data, says that 79 percent of the total number of vehicles on Indian roads are two-wheelers. Three-wheelers, including passenger and goods carriers, comprise 4 percent of the total count.
As far as incentives for electrification is concerned, the government has been exploring NITI Aayog's Feebate model proposal, which is based on 'Polluter pays' principle under which a fee or penalty is levied on polluting vehicles to offer a rebate or a reward to the lesser polluting ones. CNBC-TV18 had exclusively reported the story in December 2018.Source: CNBC-TV18