GOOD NEWS FOR ELECTRIC CAR INDUSTRY:

In a move that can prove to be game changer for India's electric vehicle industry, the government has announced a 20% subsidy for such vehicles at the ex-factory prices, subject to a different ceilings for different classes of vehicles. The move can provide substantial boost to nascent electric vehicles sector in the country.
The scheme has been offered by Ministry of New and Renewable Energy (MNRE) with a corpus of Rs 95-crore which is expected to last till 2011-12. After that the scheme will be merged with the National Electric Vehicle (EV) Policy that is currently being formulated. Government expects the manufacturers to pass on the entire benefit to the consumers that will cut prices significantly and can lead to virtually doubling of the electric vehicle market.

The scheme sets a maximum limit on the amount of the incentive at Rs 4,000 for low speed electric two wheelers and Rs 5,000 for high- speed electric two wheelers. For passenger cars, the upper limit of the subsidy has been set at Rs 1 lakh. To take an example of how much difference it will make, the Reva electric car manufactured in Bangalore by Mahindra Reva is priced in the range of Rs 3.31 to Rs 4.28 lakh across models, and will now cost less by around Rs 66,000 to Rs 85,000 on current prices.