EV makers in India ask for government subsidy

Electric carmakers in India have asked the government to provide subsidies of up to 25% on the purchase of all electric vehicles (EVs) over the next two to three years. The industry has also asked that the value-added tax (VAT) on electric cars be reduced to 4% from 12.5%. Hero Electric Chief Executive Officer Sohinder Gill said that in states such as Madhya Pradesh, Kerala, Gujarat and West Bengal, where VAT rates have been brought down to 4%, sales have increased substantially. The automakers may have been encouraged to approach the Indian government after seeing governments in the United States and Europe offer similar packages. Gasoline (petrol) price cuts announced in December 2008 and February this year have restricted growth in the EV segment, while a lack of charging stations has not helped matters. (May 4, 2009)