Can fiscal incentives pull EVs into the mainstream?

Sensemaking / Can fiscal incentives pull EVs into the mainstream?

From India to the US to Europe, states are offering subsidies for electric vehicles.

01 Sep 2011

From India to the US to Europe, states are offering subsidies for electric vehicles.

From India to the US to Europe, governments are introducing incentives to mainstream demand for electric vehicles.

The Indian Government has set up the National Mission for EVs to promote their use, and a tax rebate of 20% was launched in November 2010, with some states adding incentives of their own.

In India, the EV market is expanding. And, in a country where two wheels still dominate, electric bikes are leading the way. Nine million powered two-wheelers are bought each year, and 150,000 of these are now electric. That’s still only a tiny percentage of the total, but it goes to show that there’s huge potential for growth.

“Consumer awareness for EVs is based on ecological concerns, rather than utility”, says Harish Hande of SELCO, a sustainable energy company based in Bangalore. EVs are still too costly for the vast majority, but Hande is hopeful that a wave of cheap vehicles could make a difference to the industry’s growth. Hero Electric, the Indian market leader for plug-in two-wheelers, has forecast a new generation of cheap electric vehicles, priced from just $400.

Elsewhere, tax credits of up to $15,000 in the US may shift to grants at point of sale this year, with many states adding their own incentives on top. In Canada, the city of Quebec has announced generous rebates from 2012 – $4,000 to $8,000, depending on battery size. In the European Community, 15 of the 27 member states offer EV subsidies. The UK’s Plug-In Car Grant, launched in January 2011, offers to take 25% off the price of electric cars, up to a £5,000 ceiling. – Peter Henshaw

Photo credit: Leongoedhart / istock

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