MoRTH has issued a clarification that the sale and registration of an electric vehicle do not legally require the electric vehicle to have a battery pack.
The Ministry of Road Transport and Highways (MoRTH) has issued a clarification to all states and union territories that the sale and registration of electric vehicles do not legally require these vehicles to have a battery pack. This move is targeted at lowering the cost of purchase for small EVs – they are subject to 5 per cent GST. Given that battery costs for vehicles within these segments account for 30 – 40 per cent of the total cost of the vehicle, a lower sticker price will result in lower overall tax paid at the time of purchase. Having said that, EV batteries attract an 18 per cent GST, this will still have to be paid at the time of purchasing a battery pack.
This announcement is not an amendment to the Central Motor Vehicle Rules – it is just a clarification of the existing guidelines.
Where this policy makes a strong case is in the ecosystem of commercial three-wheeler and two-wheeler EVs. If battery swapping stations are set up, transport companies can buy their EVs without a battery, which they can rent from such stations for a fixed cost to operate their services non-stop. Four-wheeler EVs come with far more complex and structurally integral battery packs, which is why they feature battery packs that are far more complex and cumbersome to replace.
'It is a motivation to see the government working towards accelerating adoption of electric mobility. The policy now allows selling electric vehicles without batteries. This widens the scope for manufacturers and buyers both. We are swiftly adopting the much-needed flexibility and comfort in the EV ecosystem. Tax rebates will help drive the demand better. This is also expected to reduce the overall cost of acquisition of the product by saving money in the vehicle registration procedure, thus offering affordability. We look forward to more such industry boosting policies,' said Jeetender Sharma- MD and Founder, Okinawa.
'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,' said, Tarun Mehta, CEO and Co-Founder, Ather Energy.
'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. 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 swap batteries wherever they require. I look forward to more such positive interventions,' Naveen Munjal, Managing Director of Hero Electric.