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Mercedes-Benz India MD Martin Schwenk. Mint
Mercedes-Benz India MD Martin Schwenk. Mint

Govt sops drive EVs: Martin Schwenk

Schwenk says the government initiatives have started bearing fruit with the creation of an enabling framework to kickstart the adoption of electric mobility in the country

Suitable policy interventions by both the Union and state governments including a cut in goods and services tax (GST) to 5% have been an enabler for the electric vehicle (EV) ecosystem in India, said Martin Schwenk, managing director, Mercedes-Benz India Pvt. Ltd.

Schwenk said the government initiatives have started bearing fruit with the creation of an enabling framework to kickstart the adoption of electric mobility in the country. The German automaker on Thursday became the first luxury car maker and third foreign automaker to launch an electric car in the domestic market after Hyundai Motor India Ltd and MG Motor India Ltd.

The Modi administration has been urging automakers to grow production and sale of electric vehicles to reduce rampant pollution in major cities and to curb India’s dependence on costly crude imports. The plan is to turn the country into a hub for manufacturing and exports of EVs and components such as lithuim-ion batteries and cells.

Government policy think tank Niti Aayog is working with various ministries to set up giga factories for lithuim-ion batteries, along the lines of what Tesla did in the US.

In 2019, the government slashed GST rates from 12% to 5% on zero-emission vehicles to attract foreign investments in EV technology and reduce the cost of ownership. “The tax incentive is definitely an enabler for developing electric space in India. That’s true for all manufacturers and I would hope that there will be some consistency on these policies overtime because it will help develop a stronger footprint and increase localization and adoption of electric vehicles," Schwenk said.

“We now have the advantage on the customer side for reduced GST. While a similar car would have attracted 50%, for electric, it is just 5%. Some states exempt the road tax and that helps bring down the on-road price. We also believe that we will have the first mover benefit," he said.

Last year, the government also earmarked 10,000 crore to encourage development, manufacturing and use of EVs under the second phase of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme.

On Thursday, Mercedes-Benz launched the EQC, its first EV in India, at 99.30 lakh. The vehicle will be sold at 13 dealerships across Delhi, Mumbai, Bangalore, Hyderabad, Chennai and Pune.

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