Cost of petrol and diesel vehicles will be the same as that of an Electric Vehicle (EV) within 2 years, said Transport Minister Nitin Gadkari.

While addressing the 64th ACMA annual session, the Union Minister said that he doesn’t have a problem with the Finance Minister giving subsidies on EVs after earlier suggesting that subsidies to EV makers are no longer needed as the cost of production has come down and consumers are now opting for electric vehicles (EVs) or CNG vehicles on their own.

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However, he added that with falling lithium battery cell prices since last year the cost of production of EVs has come down and it can be maintained even without subsidies.

Union Minister of Road Transport and Highways Nitin Gadkari on Monday clarified that he is not against providing incentives for any particular fuel technology.

“I am not against incentives. If the Ministry of Heavy Industry and Ministry of Finance want to roll it and it will benefit, I don’t have any problem. I will not oppose it,” the minister said.

The minister said that 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.

It is to be noted that in India, EVs had a 6.3% market share last year, a 50% jump from the prior year.

Globally, the market share of EVs in 2023 was over 15%, with China accounting for 60% of worldwide sales.