Mahindra’s electric car Reva has experienced a steep fall of 50% in its sales volume after the increased subsidy scheme applied by the Government. Basically the scheme offered by the Ministry of New and Renewable Energy is no longer active and is lapsed six months before the rollout of a new and better policy from the National Council of Electric Mobility.
Basically as per specifications, subsidy was supposed to make the electric car Reva inexpensive in around two ways. First by amounting to 20% of the ex-factory cost or by Rs. 100,000, whichever stands less, making the Reva cheaper in the market by Rs. 75,000 to Rs. 93,000.
President, Automotive & Farm Equipment Sectors, Mahindra & Mahindra Ltd., Mr. Pawan Goenka said, “The withdrawal of this subsidy has been a setback because we were expecting it to continue.”
Now after the lapse of subsidy, Reva cars are available for Rs. 4 to Rs. 4.87 lakh, ex-showroom Bangalore.
The future which appeared promising for Mahindra and Mahindra, now seem dim as this abrupt policy vacuum threatens the future plans. Mahindra acquired Reva in May 2010, investing 100 crore for the project and increasing its holding from 55.2% to 64.26%.
Though the old subsidy was in favor of consumers, the new one to be launched by the National Council of Electric Mobility will only be introduced in the second quarter of this fiscal for further promoting electric vehicle sales. Reva did posted good sales growth of 35% in financial year 2012 by selling 470 units in a year.
Mr. Goenka further added, “The new policy to be announced soon will surely provide a boost to electric vehicle sales.”