As the Indian government gears up for the upcoming budget, the electric vehicle (EV) industry eagerly anticipates crucial policy reforms and incentives to accelerate its growth. In 2023, the EV market in India saw a remarkable surge, with sales increasing by 150% year-over-year, reaching over 1.5 million units. Despite this growth, EVs still represent only 1% of total vehicle sales in the country. Industry leaders are calling for enhanced subsidies, improved charging infrastructure, and favorable tax policies to make EVs more accessible and attractive to consumers.
With the right support, the EV sector could play a pivotal role in India’s sustainable transportation future.
Look at the Industry Leaders, what they say :-
Mr. Prashant Vashistha, Chairman and Managing Director, Sokudo Electric India
“With just a few weeks until Union Budget 2024, the electric 2-wheeler sector is looking forward to favorable policy reforms and incentives that could advance India’s green mobility goals. Initiatives like the FAME 2 scheme have played an important role in accelerating EV adoption, offering subsidies of up to Rs. 20,000 per two-wheeler electric vehicle. However, to maintain this momentum, the industry seeks stability in policies, an increase in budget allocations toward subsidies, and an extension of funding for newer EV models. The government’s vision of 30% EV penetration by 2030 calls for comprehensive support in the form of tax credits for EV purchases, GST reductions for batteries, and support for research into battery technologies. Currently, the GST rate on EVs is 5% but we hope for some relief on components like batteries in the upcoming session. Additionally, I am hopeful for green taxation, an initiative that includes the possibility of a carbon tax on high-emission industries. Such a move could accelerate the transition to electric vehicles and help vehicle owners be more conscious about their impact on the environment. With these reforms, we can make electric two-wheelers more accessible and affordable for everyone, aligning with the environmental goal and reducing carbon footprint effectively.”
Akihiro Ueda, CEO, Terra Charge
“India’s policy landscape has always been supportive of electric mobility and directed towards accelerating EV penetration. Schemes like FAME-II and the Production Linked Incentive (PLI) program have been key catalysts of EV growth, but given the country’s ambitious EV goal and global competition, the EV industry is now clamoring for more comprehensive measures that support the entire ecosystem, especially the charging infrastructure. Hence, as we await the Union Budget 2024, we look forward to more policy reforms and favorable measures like anticipated FAME-III and increased allocations towards key EV segments such as battery technology and EV charging stations that assure an overall growth of the industry. In the interim budget, the government promised support for the USD 913 million EV charging market and shared plans to encourage e-buses for public transportation. As we await the final budget, we seek more clarity on the promised support and new measures that could address barriers such as high tax components, licensing norms for EV charging point operators, regulatory hurdles, and standardization discrepancies that continue to hamper the deployment of charging infrastructure. I believe such measures will help India’s domestic EV landscape transform into a global EV hub and help it attract investments from domestic and international entities, paving the way for industry players like us to innovate and grow.”
Nehal Gupta, Founder and Managing Director, AMU
With the Modi government coming into power for the third time, the industry expects stability and extensions in policy reforms and budgetary allocations. As we move closer to the final budget, anticipation regarding EV policies such as FAME-III with an outlay of Rs. 10,000 crores, increased CAPEX for startups manufacturing drones and EVs and simpler eligibility criteria for PLI applicants are emerging as the top demands for the broader industry. I believe that easing access to subsidies and incentives through such measures could help both lenders and borrowers, in turn, support the EV sales penetration in the country. NBFCs that service EV fleet owners, manufacturers, and retail buyers may feel more encouraged to increase their loan offerings and credit size in such a pro-EV policy environment. Being a part of the cleantech financing space, I am hopeful for measures to enhance investment structure and address TDS and GST-related challenges faced by NBFCs and refinancing institutions. I am also looking forward to a reduction in interest burden, to make financing more accessible for women EV startup owners and buyers, as I believe such a move could assure EV adoption across all segments. Besides these, I believe focused reforms and measures towards hydrogen and biofuel-driven vehicles could encourage cleantech companies and financing institutions to tailor new policies and product offerings, benefitting India’s cleantech drive.
Pankaj Goyal, Co-Founder & COO, AutoNxt Automation Pvt. Ltd.
As the electric vehicle (EV) industry anticipates the upcoming budget, key stakeholders are looking forward to pivotal policy reforms and incentives that can drive sustainable growth and adoption. We believe that robust policy frameworks focusing on infrastructure development, such as charging stations and battery recycling facilities, are crucial. Additionally, targeted incentives like tax breaks for EV manufacturers and buyers, subsidies for R&D in battery technology, and incentives for domestic manufacturing of EV components will play a pivotal role in accelerating the industry’s momentum.
The government’s support in fostering a conducive regulatory environment, including streamlined approval processes and clear guidelines for EV manufacturing and sales, will instill confidence among investors and manufacturers alike. Moreover, promoting consumer awareness through educational campaigns about the environmental benefits and long-term cost savings of EVs will stimulate demand.
Subsidies are a must in FAME 3 for electric tractors to be acceptable. Agriculture-related subsidies should be extended to electric tractors, and for that, the Agri ministry should start the tests for E-Tractors for which the test standards should be finalized.
As industry leaders, we are optimistic about the government’s commitment to fostering sustainable mobility solutions. We look forward to collaborative efforts between policymakers, industry players, and other stakeholders to realize India’s vision of becoming a global hub for EV manufacturing and innovation. Together, we can create a future where electric mobility not only transforms the automotive landscape but also contributes significantly to environmental sustainability.
Hari Kiran, Co-Founder and COO, eBikeGo
As a pioneer in the electric vehicle industry, eBikeGo is eagerly awaiting the 2024 budget announcement. This year’s budget has the potential to be a game-changer for the sector, marking a significant turning point in our journey towards a more sustainable and environmentally friendly future. We’re hoping for policies and incentives that will drive widespread adoption, foster innovation, and invest in the development of critical infrastructure.
Key expectations include increased subsidies and incentives for EV manufacturers and consumers, expanded tax credits, and reduced taxes and tariffs on EV components. We advocate for substantial investment in EV charging infrastructure across urban and rural areas to support the growing number of electric vehicles on the road.
As per the budget of 2023, INR 51.72 billion to the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) program, which includes funding supports, subsidies and promotes clean energy adoption in vehicles, including EVs. We are expecting a higher budget being allocated for EVs in the budget of 2024.
Additionally, eBikeGo seeks initiatives that promote local manufacturing, research and development, and skill development in the EV sector. Increased funding for R&D, including battery innovations and renewable energy integration, is crucial. A comprehensive recycling framework for EV batteries and components is also essential to ensure sustainability.
A forward-thinking budget will accelerate the growth of the EV industry, reduce carbon emissions, and help our nation achieve its climate goals. We’re confident that the government will take bold steps to make EVs more accessible, affordable, and sustainable, paving the way for a cleaner, greener future.
