Union minister Nitin Gadkari on Thursday said there is no need to provide subsidy for electric vehicles (EVs) market as consumers are on their own now choosing EVs or CNG vehicles.

Addressing BNEF Summit, Gadkari said initially costs of manufacturing electric vehicles were high, but as demand has increased, production costs have dropped, making further subsidies unnecessary.

"Consumers are now choosing electric and compressed natural gas (CNG) vehicles on their own and I do not think we need to provide much subsidy for electric vehicles," the road transport and highways minister said.

The minister pointed out that GST on electric vehicle is lower than petrol and diesel vehicles.

"In my opinion, manufacturing of electric vehicles no longer needs to be subsidised by the government.

"The ask for subsidies isn't justified anymore," he said.

At present, 28 per cent GST is levied on vehicles powered by internal combustion engines, including hybrids, and 5 per cent on electric vehicles.

On Wednesday, Union Heavy Industries Minister H D Kumaraswamy had said the government is expected to finalise the third phase of its flagship electric mobility adoption scheme FAME in a month or two.

He said that an inter-ministerial group is working on the inputs received for the scheme, and efforts are being made to address the issues in the first two phases of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) scheme.

FAME 3 will replace the temporary Electric Mobility Promotion Scheme (EMPS) 2024, which is set to expire in September.

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