The Ministry of Road Transport and Highways has issued a notification to all state and union territories transport authorities that the sale and registration of electric two-wheelers and electric three-wheelers to be allowed without batteries. Given that the cost of the battery itself constitutes up to 30-40 per cent of the total cost of an electric two-wheeler or a three-wheeler, this move could lead to a significant push in the adoption of electric vehicles. The cost of an electric vehicle could be reduced to a large extent, making them more affordable.
Naveen Munjal, Managing Director, Hero Electric, says "The policy is a welcome move. I am excited about the possibilities that exist in making EVs accessible to every individual in the country. All we need is a combination of such pioneering policies for it to work for us as per plan in the long-run will work in the long term. For this to take off and be able to efficiently pass on the benefit to the consumer, we ought to work towards a strong infrastructure that allows EV owners to charge and swapping batteries wherever they require. I look forward to more such positive interventions."
The company or the energy service provider can always sell the battery or offer the use of one with a leasing/subscription model. This is of course only related to electric two and three-wheelers. There hasn't been any mention of electric passenger cars or electric buses in the circular.
The circular that the Road Transport Ministry had sent to all other state transport authorities, read, "For the promotion of electric two-wheelers and three-wheeler vehicles, there are recommendations brought to the notice of the Ministry to de-link the cost of the battery (which accounts for 30-40 percent of the total cost) from the vehicle cost."
Tarun Mehta, CEO and co-founder, Ather Energy, said, "MoRTH's new policy is a great move for both customers and OEMs. It lowers the upfront cost that the consumer has to pay and allows OEMs to build superior products at an affordable price point. Ather has been proactively experimenting with different sales and ownership models and the new policy opens up new opportunities in financing options."
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The Rule 126 of Central Motor Vehicle Rule, 1989 states that all electric vehicles and batteries need to be tested by requisite agencies and have a type approval certificate. But the catch here is what happens to the subsidies under the government's FAME scheme, because, the subsidies on electric vehicles is based on the battery capacity. The question here is how will the government offer incentives going forward, if batteries are taken out of the equation.