In recent days, the government has finally cut the excise tax on electric car batteries by 10%.The GST commission, set up by the Indian government, has cut the tax on goods and services for lithium-ion batteries from 28 per cent to 18 per cent.Lower taxes on battery goods and services will reduce the overall price of electric cars in the country.
Battery packs are an important part of electric cars, and the price of electric cars in India is expected to drop by around 8-10% as the tax on batteries is cut.
Mahindra&Mahindra and Tata Motors are the only carmakers in India to make electric cars.But the price of electric cars is unlikely to drop immediately because batteries and other components are purchased in advance.
As a result, the price of electric cars will fall when manufacturers buy new batteries.But the price of electric cars is unlikely to drop immediately because batteries and other components are purchased in advance.As a result, electric cars will be cheaper as manufacturers buy new batteries.A drop in sales tax on lithium-ion batteries would also help expand investment in batteries for India's electric cars.The current import tax on such batteries is 20 per cent.
At the moment, most of India's electric cars rely on imported lithium-ion batteries, but that could change dramatically if India produced its own batteries, and the penetration of electric cars would be higher.