SMEV Calls For Green Tax On ICE 2-wheelers

The registered association representing Indian manufacturers of electric vehicles SMEV (Society of Manufacturers of Electric Vehicles) has called upon the Government to levy an additional Green Tax on ICE vehicles to incentivise EV adoption and support the reduction of pollution creating crude oil imports.

The Green tax would also rationalise the expected drop in sales of EVs on account of the reduction in subsidies starting this month. The SMEV believes that an increase in taxes to the tune of 100 basis points on traditional polluting ICE 2-wheelers will be required to fund subsidies for electric  2-wheeler vehicles and put the FAME scheme back on track. 

Pointing out that an average ICE two-wheeler emits nearly 300 grams of CO₂ per kilometre, the SMEV said that with an average kilometre run of 30 km per day [lifetime mileage of 70,000 km], the CO₂ burden from ICE scooters was a humongous 9 Kg of CO₂ per vehicle per day.  

With sales in FY’23 of 1,58,62,087 units, the emission is almost 142 Million kg of CO₂ released in the atmosphere per day – and a mind-blowing 333 Billion Kg of CO₂ - for the lifetime of the FY23 ICE scooters - which has potential long-term health - and financial implications for the country. 

Quoting NitiAayog which has established that electric vehicles are much more efficient since they covert around 60 per cent of the electrical energy from the grid to power the wheels, whereas petrol or diesel cars can only convert 17-21 per cent of the energy stored in the fuel to the wheels, which the SMEV said indicates a waste of around 80 per cent.  Additionally, petrol or diesel vehicles emit almost 3 times more carbon dioxide than an average Electric Vehicles.

Sohinder Gill, Director General of SMEV, reiterating the association’s recommendation, said, “It is time that the EV sector is allowed to compete at par with ICE vehicles. While we are tackling awareness and adoption issues as an industry, the biggest hurdle is the cost of ownership as India is a price sensitive market. Additional Green Taxing of ICE vehicles will not only bring EV and ICE at the same level but also encourage bigger OEMs to enter the EV market with confidence and a long-term outlook, which will benefit the country.”

To reduce the impact of charging electric vehicles, India has ambitiously aimed to achieve 40 per cent cumulative electric power installed capacity from non-fossil fuel-based resources by the year 2030.