Cheaper EV Batteries To Bring Down Fares By 30%, Says Nitin Gadkari

The cost of operating an electric vehicle is expected to be on par with that of fossil fuel vehicles as battery prices ease, according to Transport Minister Nitin Gadkari.

The reduction in battery prices will also help bring down pollution and lower imports, leading to travellers saving 30% in fares, the minister said.

The cost of lithium-ion batteries has come down from $150 per kilowatt per hour to $112, Gadkari told NDTV Profit's Sanjay Pugalia. The segment has seen 350% growth since its introduction in India, he added.

"When this comes down to $100, the (operating) cost will be the same as that of petrol and diesel vehicles," the union minister said. "If you spend Rs 20,000–25,000 on petrol vehicles in a month, you will incur only Rs 2,000 on electric vehicles."

Gadkari plans to run electric buses in all Indian cities in the next five years, including for long-distance travel on the Delhi-Shimla, Delhi-Chandigarh and Pune-Mumbai routes.

EV manufacturing has gained pace in the country, with output rising across segments.

"There are 400 electric scooter manufacturers (in India). We have manufacturers making electric scooters with a range of 60 km," Gadkari said.

Last Friday, the central government notified a new EV policy, which is expected to pave the way for global manufacturers like Tesla Inc. with tax reliefs.

Under the new policy, global electric carmakers may pay a 15% duty on imported electric cars after committing $500 million in investment in local manufacturing operations. The import tax currently ranges between 70–100%, according to a government gazette.

The minimum cost, insurance and freight of the electric car must not exceed $35,000. Though the policy has no upper limit on the investment, the facility has to go onstream in three years and achieve 50% localisation in five years.