India's EV Revolution: Surging Growth, Government Initiatives, and Industry Expectations for the 2024–25 Budget

India’s EV Revolution: Surging Growth, Government Initiatives, and Industry Expectations for the 2024–25 Budget

The electric vehicle (EV) industry is growing fast all over the world, and it’s also getting very popular in India. People in the industry are excited about this growth.

In 2023, India saw a big increase in electric vehicle sales. About 15.3 lakh EVs were sold, which is almost 50% more than the 10.25 lakh sold in 2022. Even though this is just a small part of all car sales, it clearly shows that more and more people are starting to choose environmentally friendly cars.

The Central and State governments have implemented several initiatives, such as the FAME subsidy, state-specific policies, the establishment of an EV charging infrastructure, and the introduction of the Production Linked Incentive (PLI) scheme. Despite these efforts, industry leaders are anticipating further actions from the government. Their expectations include…

Mr. Raman Bhatia, Founder and Managing Director of Servotech Power Systems Ltd., shares his expectations for the Budget 2024 at All India EV. 

 “Significant government funding allocated to charging infrastructure in Tier II and Tier III cities, with a focus on open data standards and APIs, promotes interoperability and a resilient software ecosystem. An impactful proposal to reduce GST on lithium batteries from 18% to 5% substantially reduces EV acquisition costs, increasing appeal. Addressing the human aspect, incentivizing upskilling and reskilling through centrally sponsored schemes is crucial for nurturing a skilled workforce in the evolving EV industry. Sustainable growth in the EV sector necessitates technological innovation to lower costs, extend range, and transform charging infrastructure. This progression relies on developing BMS and fostering domestic capabilities for battery manufacturing. Strategically promoting ICE+EV hybrid vehicles, particularly in the smaller segment, is vital for achieving economies of scale. State policies, backed by the Central Government, can incentivize this through investment policies and centrally sponsored schemes. The targeted implementation of PLI schemes for EV charging companies remains pivotal. Continued support, including tax deductions for EV purchasers, extensions of FAME-II subsidies, or the introduction of FAME-III, reinforces the commitment to a green transition. The automotive industry keenly anticipates insights into the GST landscape, especially for entry-level two-wheelers, with expectations around potential FAME 3 schemes, and a revision of GST rates for electric two-wheelers. Calls for a uniform 5% GST on all EV spare parts, aligning with 5% GST on vehicles, resonate within the industry as a move toward a more equitable tax structure.”

Pragya Goyal, CEO & Co-Founder, Vegh Automobiles: “To capitalise on the momentum set out by the current government, the interim budget will need to take into account forging trade agreements that make exports more lucrative for companies seeking to diversify their production and emphasise bolstering the logistics sector. In light of the existing global constraints and monopolisation in the lithium supply chain, there is a pressing need for India to engage in research aimed at creating indigenous and cost-effective machinery and technology.”

This quote has been taken from Financial Express

Akshit Bansal, CEO & Founder, Statiq anticipates the government to align its policies with the net-zero goal and sustainable development. In particular, the implementation of Production-Linked Incentive (PLI) schemes tailored for EV charging companies is of utmost importance. The growth of EV infrastructure plays a pivotal role in driving widespread EV adoption in India, and financial incentives will undoubtedly accelerate the expansion of our charging network. Moreover, we look forward to tax reform that not only supports our industry but also encourages consumers to embrace electric vehicles. Circular economy measures should also find a prominent place in the budget, promoting recycling, waste reduction, and the use of eco-friendly materials in manufacturing.

This quote has been taken from Financial Express