The Society of Manufacturers of Electric Vehicles (SMEV) has urged the government to impose an additional green tax on motorcycles powered by internal combustion engines.
The aim is to incentivize the adoption of electric vehicles (EVs) and reduce the reliance on imported crude oil, which contributes to pollution. According to SMEV, the green tax would help offset the expected decline in EV sales resulting from reduced subsidies, which have recently been implemented.
SMEV proposes an increase in taxes by 100 basis points on conventional two-wheelers to generate funds for subsidies on electric two-wheelers and ensure the success of the FAME (Faster Adoption and Manufacturing of Electric Vehicles) scheme.
Sohinder Gill, Director General of SMEV, emphasized the need for a level playing field between EVs and internal combustion engine (ICE) vehicles, stating that additional taxation on ICE vehicles would encourage larger manufacturers to confidently enter the EV market, benefiting the country.
The Ministry of Heavy Industries has already reduced subsidies for electric two-wheelers, resulting in price hikes for these vehicles. The incentives have been capped at 15% of the ex-factory price, down from the previous 40%.