The Union Budget 2024 is eagerly awaited by the electric vehicle (EV) sector, with stakeholders hoping for significant policy support and incentives to accelerate India’s transition to electric mobility. As the Modi government enters its third term, the EV industry is optimistic that the new budget will provide the necessary boost.
Inderveer Singh, CEO and Founder of EVage, highlights the urgent need for government intervention to reduce pollution from commercial vehicles. He emphasizes the importance of decarbonizing commercial fleets, which contribute significantly to vehicular pollution. Singh acknowledges the recent statement by the Union Minister of Heavy Industry indicating that the FAME III norms are unlikely to be announced in the upcoming budget. However, he remains hopeful that these norms are under consideration and some provisions might be included.
Chetan Maini, Co-founder and Chairman of SUN Mobility, advocates for a level playing field for all EV technologies, particularly in terms of GST and subsidies. He expects the budget to introduce a comprehensive Battery Swapping Policy, launch FAME III with increased allocation for e-buses, and incentivize local production of EV components. Maini emphasizes the need to encourage innovations in battery technologies without hindering advancements through standardization, especially considering the expected doubling of electric bus penetration this fiscal year. He also stresses the importance of extending incentives to fleet operators and rolling out EV infrastructure through public-private partnerships.
Pratik Kamdar, CEO and Co-Founder of Neuron Energy, reflects on the positive impact of reduced customs duties on EV parts in the previous budget and hopes for similar measures this year. He anticipates progressive measures in the July 2024 budget to further encourage domestic production and align with the ‘Make in India’ initiative. Kamdar suggests revising GST for entry-level two-wheelers and imposing a uniform 5 per cent GST on all EV spare parts to foster widespread adoption. He also calls for a cohesive strategy under FAME III to accelerate EV adoption, including subsidizing financing options and reducing GST on batteries by 13 per cent.
Kunal Arya, Co-Founder and Managing Director of ZELIO Ebikes, identifies several key measures that could drive growth and adoption of EVs. He advocates for increased subsidies to make EVs more affordable, expanding the network of charging stations powered by renewable energy, and reducing GST on batteries and components. Arya notes that simplifying financing options for EV purchases will further encourage adoption by easing the financial burden on consumers. He also emphasizes the importance of promoting fleet electrification, providing export incentives, and supporting skill development programs to build a knowledgeable workforce in the EV industry.
Mukesh Taneja, CEO and Co-Founder of GT FORCE, views the upcoming budget as a critical juncture for India’s EV industry. With the short-term EMPS 2024 set to end on July 31, 2024, Taneja urges the government to introduce a robust, long-term successor. He anticipates increased budgetary allocation for expanding EV charging infrastructure nationwide. Taneja also hopes for incentives for battery technology development, localization of EV components, and reducing GST rates on EV components and batteries from 18 per cent to 5 per cent.
Sameer Aggarwal, Founder and CEO of Revfin, anticipates government backing in green initiatives, especially in the EV sector. With significant investments required for financing EV purchases, Aggarwal explains that fintech companies like his can play a vital role in facilitating access to funds. He looks forward to clearer regulations and supportive policies in the budget to drive innovation, focusing on streamlined regulatory processes, increased funding opportunities, and enhancements in digital lending, SME financing, and cross-border trade facilitation.
Prassann Daphal, CEO at Recyclekaro, expects the budget to emphasize sustainability, particularly in the battery recycling sector. He calls for a reduction in GST on waste lithium-ion batteries from 18 per cent to 5 per cent, an extension of the FAME II Scheme, and a specialized Production-Linked Incentive (PLI) plan for recycling lithium-ion batteries. Daphal asserts that higher funding for research and development of battery recycling infrastructure and technologies is crucial.
Xitij Kothi, Co-founder of Vidyut, highlights the need for clearer policies and incentives for charging infrastructure. He hopes for government support in addressing the disparity in subsidies and GST on EV batteries, which remains a significant challenge. Kothi adds that a framework and incentives from the government to fuel the growth of the secondary market for EV batteries will greatly benefit the industry.
As the Union Budget 2024 approaches, the EV sector will be watching with bated breath, hoping for measures to support sustainable mobility, foster innovation, and solidify India’s position as a global leader in electric vehicles.
