EV subsidies no longer needed, says Transport minister Nitin Gadkari

New Delhi: Road transport and highway minister Nitin Gadkari on Thursday said there is no need to provide subsidies to electric vehicle makers as cost of production has come down and consumers are now opting for electric vehicles (EVs) or CNG vehicles on their own.

Speaking at an event, Gadkari said initially costs of manufacturing electric vehicles were high, but as demand has increased, production costs have dropped, making further subsidies unnecessary.

"Consumers are now choosing electric and compressed natural gas (CNG) vehicles on their own and I do not think we need to provide much subsidy for electric vehicles," the minister said, pointing out the lower rate of GST on electric vehicles (5%) compared to petrol and diesel vehicles (28%). "In my opinion, manufacturing of electric vehicles no longer needs to be subsidised by the government," he said, adding the demand for subsidies isn't justified anymore.


While ruling out additional taxes on petrol and diesel vehicles, Gadkari said the overall shift away from fossil fuels to alternative fuels would be a gradual process, given the size of India's economy and energy needs.