Tata Motors on Saturday won the first contract to supply electric vehicles to replace petrol and diesel cars used by government departments, after it quoted the lowest price for the vehicles.

Each car will be supplied at Rs 11.2 lakh, inclusive of the goods and services tax and a five-year warranty, The Economic Times reported. Tata Motors will supply the electric version of its Tigor sedan, the batteries for which will be imported.

Tata Motors will supply the first 500 e-cars in November 2017 to Energy Efficiency Services Limited, or EESL, a joint venture company formed by public sector units under the Ministry of Power. The firm was chosen through an international competitive bidding contest as part of the government’s plan to cut demand for fossil fuels and reduce carbon emissions.

Mahindra & Mahindra, the other contender, quoted 13 lakh, but can win 40% of a future contract if it matches Tata’s bid, the newspaper report quoted EESL managing director Saurabh Kumar as saying. The EESL tender is the world’s largest single electric vehicle procurement. Apart from Tata Motors and Mahindra, Japanese carmaker Nissan also participated, Business Line reported.

India plans to replace all its petrol and diesel-run vehicles with an all-electric fleet by 2030. The government think tank Niti Aayog said in May 2017 that it is looking at ways to lower taxes and interest rates for loans on electric vehicles, and cap the sales of conventional cars.