Responding to a question in Parliament, Union Minister Nitin Gadkari said the Ministry of Road Transport and Highways has no proposal to advise banks to provide car loans at affordable interest rates to buyers of electric vehicles.
His statement came in response to a question whether his ministry proposes to advise banks to provide loans at cheaper interest rates to buy environment-friendly vehicles. Union Road Transport and Highways Minister Nitin Gadkari dismissed reports of alleged proposals advising banks to offer cheaper car loans on EVs.
Gadkari confirmed in Parliament that the Ministry of Road Transport and Highways has no such proposal at present. The growth in EV adoption in 2022 has been stupendous with over 10 lakh EVs being registered till December last year.
While most of the EVs being bought are from the two-wheeler segment, the passenger vehicle segment continues to see a boom. While many leading automakers have launched their own electric cars in the last one year. Even after including the government subsidy under the FAME-II scheme, these vehicles cost more than Rs 10 lakh and are out of reach of the mass consumer
Tata Motors’ Tiago EV is the only one that is priced from Rs 10 lakh onwards, which is priced at Rs 8.49 lakh ex-showroom for the base model. However, during the recent Budget 2023, Finance Minister, Nirmala Sitharaman announced that Rs 51.72 billion has been allocated to promote EVs and other clean mobility solutions under the FAME-II scheme.
This is a sign of the country’s serious pressure towards carbon-neutral emissions targets. In addition, customs duty on EV battery components and manufacturing equipment was removed, which is expected to bring down the cost of EVs in the country. The ongoing subsidy on buying new EVs has been extended for one more year in the 2023 budget.