New Delhi– Energy Efficiency Services Ltd (EESL) plans to procure 10,000 electric vehicles (EVs) for government use, the first round of bids for which has already been conducted by the state-run company, Parliament was told on Thursday.

In a written reply to the Lok Sabha, Power Minister R.K. Singh said that bids for EVs were invited through open tender, while contracts have been awarded to Tata Motors and Mahindra & Mahindra for respectively supplying 250 and 150 of these environment-friendly vehicles.

The supply agreements include a five-year annual maintenance contract.

“EESL will provide these vehicles on lease to replace the existing petrol and diesel vehicles taken on lease by various government organisations and charge lease rent from these firms,” R.K. Singh said.

EESL announced last month that it will invite bids for supply of a second lot of 10,000 EVs around March-April next year.

Meanwhile, the Society of Manufacturers of Electric Vehicles (SMEV) on Thursday urged the government to reduce the Goods and Services Tax on batteries used in electric vehicles from the current highest tax rate of 28 per cent.

“Under the new GST regime, lithium-ion batteries used in EVs have become significantly costlier because of the 28 per cent GST when sold separately as against the GST rate charged when sold with the vehicles,” an SMEV statement said here.

“Higher tax on batteries is impacting retail sales of electric two-wheelers as dealers generally do not maintain an equal inventory of vehicles and batteries,” it said.

The association also urged the government to launch the next phase of the Faster Adoption and Manufacturing of Electric Vehicles scheme for a longer period of six years and its time-bound implementation.

“Due to high ownership cost of EVs in the present scenario, the approach to Demand Incentives and Viability Gap Funding needs to be changed and the existing subsidy module needs to be enhanced for the next 6 years as compared to the previous short term periods of 6 months to 1 year,” the statement said. (IANS)