NITI proposes : SIAM postpones

NITI  Aayog has proposed that India completely switch over to Electric Vehicles by 2030

Yesterday , SIAM ( Society of Indian Automotive Manufacturers ) submitted a white paper to the Ministry of New and Renewable Energy ( MNRE ) , saying :

·         going by the current rate of production and sales it will be difficult to move all the vehicles to electric by 2030

·         we can move 40% of the total vehicles by 2030

·         we can switch over to 100 % E-Vehicles , only by 2047

(  Source : http://www.livemint.com/Industry/UBv5eYRwLshljuvi70XjHJ/40-of-vehicles-in-India-to-become-electric-by-2030-propose.html  )

No doubt , Indian Auto Manufacturers are a hard-headed practical lot , with their feet  solidly on the ground

They know the hurdles to be faced in such a revolutionary transport transformation

So , it is no surprise that they have taken a safe / less risk , approach

As an “ Interest Group “ , they had to present a “ Common Front “ to the Government

But , no one need doubt that in their “ Individual Capacity “ , each auto manufacturer is a “ Rational Player “ , working double-time to get ahead of the competitors to grab a bigger share of the “ Market Pie “ , as explained below :

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http://www.gametheory.net/dictionary/ url_of_entry.html

In its mildest form, rationality implies that every player is motivated by maximizing his own payoff.

In a stricter sense, it implies that every player always maximizes his utility, thus being able to perfectly calculate the probabilistic result of every action.

Now , imagine that the ROAD-MAP DOCUMENT for ELECTRIC VEHICLES ( - which is expected to get released by the Transport Ministry by this month-end ) , contains the following provision :

EVICT [ Electric Vehicle Incentive Corporate Tax ] Scheme :

·         The annual revenue ( income ) through sale of Electric Vehicles will be exempt from Corporate Income Tax

·         There will be a GST of 5 % on sale of Electric Vehicle and of 25 % on Petrol / Diesel Vehicles

·         The income from sale of Petrol / Diesel vehicles will be subject to normal Corporate Income tax @ 30 %

·         For the same period, sale of India-manufactured Lithium-ion Batteries will be exempt from Corporate Income Tax

·         This provision will commence from 01 April 2018 and expire on 31 March 2035

·         All Auto Manufacturers will need to submit to the Transport Ministry , an Annual Return , showing the break-up of Sales ( Numbers of Vehicles and Revenue – wise ) between the Petrol-Diesel and the Electric Vehicles ( with copy to Finance Ministry )

  

I get a feeling that , if such a provision were to be part of the ROAD MAP , that “ Road “ will , suddenly shrink from year 2047 to year 2027 – without needing any persuasion  !

And , without having to offer any other “ Incentive / Subsidy [ ala Piyush Plan of 25 March 2015 ] “ , either to Auto Manufacturers or to the buyers !

Reason ?

With no Corporate Income Tax and a GST of just 5 % , Auto Manufacturers will be able to price their Electric cars, 25% BELOW the selling price of equivalent Petrol car !

Lower price driven demand will ensure early adoption without other incentives

Not only that

To ensure that the buyers of E Cars do not suffer from “ Range Anxiety “ [ in absence of BatteryCharging Stations , at every kilometre distance ] , the Auto Manufacturers will come up with ISRO-inspiredE Cars with Solar Roof Top Panels , charging a 5 Kwh Lithium-ion Battery !

And charging from domestic electric outlet at home , overnight !

Dear Shri Nitin Gadkariji :

In the past ( by beingangry and bulldozing ) , you have not endeared yourself to the Auto Manufacturers )

But by announcing the EVICT Scheme in the current session of Lok Sabha, you will set in motion the wheels of an unprecedented industrial revolution !

20  Dec  2017

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