Vehicle Registration Charges To Increase By 400% In India — A Move To Encourage Electric Mobility

Vehicle registration and re-registration charges may go up by over 400 percent if the government goes through with its plan of introducing a new rule. The government is doing its best to reduce pollution by discouraging the use of fossil fuel-powered vehicles. This new plan is also one of the government's strategies for the same.

Over the last few weeks, the government has come up with several strategies and plans to promote electric vehicles. Most people associated with the automotive industry strongly opposed these plans as it could cause irreparable damage to the industry's ecosystem.

The government however was very vocal about its plans and asked manufacturers to come up with a roadmap towards an electric future within just 14 days. According to the government's plan, all three wheelers sold in the country from April 2023 should be electric, all two-wheelers below 150cc should be replaced with electric ones by April 2025 and all vehicles sold after 2030 should be electric.

Now, the government has bigger plans to discourage the use of old vehicles. It has proposed a steep hike for renewal of registration of vehicles that are over 15 years old. The renewal fee for passenger cars could be raised to a maximum of Rs 10,000 from the existing Rs 1,000.

For taxis, the ministry has sought to increase the renewal fee to approximately Rs 15,000 from the existing Rs 1,000; for trucks the renewal fee could be raised to Rs 40,000, up from the existing Rs 2,000.

According to existing motor vehicle rules, registration of a vehicle has to be renewed when it turns 15-years-old. This practice has to be continued five years after that. The new plan if imposed as a rule will make this process extremely expensive and in turn discourage people from using their old vehicles.

It is not just for old vehicles, but the government is even considering increasing registration fees for new vehicles. For passenger cars, the government intends to raise the registration fee by 400 percent from Rs 1,000 to Rs 5,000. The same could be increased by over 1,200 percent for trucks, from Rs 1,500 to Rs 20,000.

We are unsure at the moment if the same will be applicable on electric vehicles. If it is, the government will be unsuccessful at promoting electric vehicles the way it wants to. Additionally, the government plans to have a fitness test for old vehicles every six months instead of the existing five years. The government also plans to hike road taxes for such vehicles substantially.

Thoughts On Government To Hike Registration & Re-Registration Fees For Petrol & Diesel Vehicles

The government is just implementing or considering the implementation of what think tank NITI Aayog suggests. It is pretty clear that whatever suggestions NITI Aayog gives to the government, will affect the automotive industry in a horrible manner. Will they actually be mandated is something that remains to be seen.