The Indian government is planning a subsidy of Rs 32,000 (US$514) on all lithium battery kits to promote electric bike use and cut down vehicular pollution, reports The Indian Express.
The move will allow lithium-ion electric bike OEMs to compete with traditional lead-acid battery powered bikes, which are around US$400 cheaper.
The proposal for the subsidy comes as the sales of electric two-wheelers slumped to a four year low of 16,000 units in 2014-15, compared to one lakh (100,000) units two years ago, said the newspaper.
To promote the e-vehicles, the government has identified six centres including Agra, Delhi, Haridwar, Bangalore and Hyderabad for pilot projects.
The country’s National Electric Mobility Mission Plan provided for a subsidy of Rs 22,000 (US$353) for a lithium battery pack, but was withdrawn in 2012.
Without the subsidy the bikes cost between Rs 80,000 (US$1285)-90,000 (US$1455) compared to a lead-acid battery vehicle, which costs as little as Rs 55,000 (US$855).
However, the Rs 800-crore (US$160million) subsidy proposal for the sector is yet to be cleared by the ministry of road transport and highways.