Reva revs up in London

London imposes congestion tax on fuel run cars which is good news for electric car companies.

4 April 2006

Reva electric car now in UKA recently imposed congestion tax by the London municipal authority is making Bangalore-based Reva Electric Car rub its hands in glee. The tax (in the range of 5-8 pounds per vehicle) is applicable to all fuel run cars, including hybrids, which cause pollution. No tax will be levied on electric cars, and the bonus for Reva is that the authorities are waiving the 12-15 pounds as parking charges on electric-run cars.

As London becomes the first city in the world to levy such a tax, B Roy, senior general manager, marketing, Reva Electric Car Company said "We expect that the sale of our car will go up to 1,000 this year from 400 last year." 90 per cent of the company's sales are in London.

He said, according to a BS report, "In London, a Reva customer will be able to save 500-600 pounds on a monthly basis. In addition, with the purchase of every car the UK government pays the customer a subsidy of 1,000 pounds for adoption of non-polluting driving methods."

Production for the 7,500 pound car will have to be stepped up, which means that Reva is aiming to double capacity from the current 600 to 1,200 in this financial year. The car is a two-door hatchback, with a seating capacity for four.

There is little demand for the cars outside London, with Japan, Cyprus, Malta, Norway and India buying around 150-200 cars per year. But Roy feels the response will increase, attributing the slow growth rate to the extra resources the car needs. According to him, "Unlike conventional cars, it takes huge resources to make technologically sophisticated electric cars, a reason for the slow pace of capacity expansion."

Priced in the range of Rs 2.20 to Rs 2.60 lakh in India, the Reva cars come in three models,  Standard, AC, and Classe. Technology is provided by US based equity partner AEV. 




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