The ministry of Road Transport and Highways (MoRTH) has allowed the registration of electric two wheeler and three wheeler without pre-fitted batteries. This allowed electric vehicle companies to sell the electric vehicle without batteries to consumers, Many companies welcome this move. This policy is really a game changer for electric vehicle market or not. We have doubts, so you do.
First lets discuss what this actually means:
Registration of the Electric high speed / RTO required vehicle can now be done for vehicle without batteries. So there will be no requirement to provide the details of battery installed in the Electric vehicle. Customers are now free to choose their choice of battery in the vehicle. This may be looks like a very good move. But trust me it isn’t profitable for a buyer.
If you think companies were not allowed to sell electric vehicle without battery, you are wrong. Many companies sells Electric vehicle without battery to dealer. Then dealer buy and install battery of their choice.
It only change the registration of vehicles requirements. Where batteries must be installed for Electric vehicles selling to consumers for RTO required vehicles. Selling of non RTO or B2B vehicle without batteries was allowed and still allowed. No change in that.
Why this is not profitable to consumers? Let us tell you. A electric vehicle falls in 5% GST category, But battery in 28% (Lead acid) and 18% (Lithium). But in vehicle preinstalled battery comes at same 5% GST, which mean pre installed battery is cheaper then one purchase outside. For a consumer, cost of electric vehicle is increased.
What good in for? This is only good if GST on battery also reduce to 5%. then it will be surely a welcome move by govt.
