In order to capture the market, automobile manufacturers have to increase the discounts in return for scrappage of old vehicles, with competition rising from many alternative vehicles, Minister of Road Transport and Highways Nitin Gadkari has said.

“If you want to capture the market, there is no option, whether they like it or not, they have to increase the discounts in the competition. Even if the product was good... if the people were not ready for that, they will not pay for it... these are intelligent people (customers), they understand the business. So 100 per cent they (manufacturers) are going to increase the discounts, and I don’t need to tell them,” Gadkari said at an event

Speaking at the 64th annual session of Automotive Component Manufacturers Association (ACMA) here, Gadkari said within two years, the cost of electric vehicles (EVs) will be the same with their petrol and diesel counterparts.

Falling lithium-ion battery prices

With falling lithium-ion battery prices, EVs can now maintain cost without subsidies, but it is for the Finance and Heavy Industries Ministries to decide if incentives need to be given to EVs, he said.

“First of all, I am not against any subsidies. I don’t have any problem,” Gadkari said when asked if more incentives were needed to accelerate electric mobility as adoption in India has not been as expected. He noted that at one point, the price of the lithium ion battery was $150 per kilowatt hour (kWh). Now, it is something around $108 to 110 per kilowatt hour. “I am confident it will come to down $100,” he added.

Gadkari further said that the manufacturing of EVs has witnessed an increase in volume terms, adding that without subsidy, manufacturers can maintain that cost (of EVs) because the cost of production is low.

“I feel that within two years, the cost of the petrol vehicle and the diesel vehicle will be the same as an electric vehicle, because already there is savings on electric vehicles.”

Gadkari added he is confident that India can become the number one automotive manufacturing hub in the world as the future of this industry is “very bright”, with factors such as advancement in technology, availability of affordable talented workforce and the Indian auto industry’s good reputation globally worked in its favour.

Recently, Gadkari had announced that automakers have agreed to offer discounts of 1.5-3 per cent or up to₹25,000 on new vehicle purchase against scrapped old vehicles.

He has been advocating about offering discounts to new customers who come after scrapping of their old cars for almost four years. However, vehicle manufacturers were not ready to offer any such discounts.

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