Pre-Budget Expectations Of The EV Industry From The Upcoming Budget


“2022 was a mammoth year for EVs. 2023 will see EVs becoming mainstream. It is noteworthy that GoI’s subsidy schemes like FAME supported this development. Electric three-wheelers, which are the backbone of mass public transportation across India, are leading this transformation. We want GoI to take cognizance and expect an extension of the FAME-II scheme similar to the one given to two-wheelers. After all, it is the livelihood of the 3W owner that we will be impacting. The Indian e-commerce space is booming, providing the tailwinds for rising demand in EVs for last-mile delivery. Commercial banks need to be pushed to step in with financing support and reduce interest rates. We also look forward to rationalisation of GST rates. Currently, 5% GST is levied on EV sales but OEMs pay 28% GST for spare parts. Bringing them under the 5% bracket can lead to a price reduction and an uptick in EV adoption (lower service costs). Range anxiety is one of the major challenges that has to be addressed by developing a robust charging infrastructure. We hope the government will provide more CAPEX subsidy (up to 40-50%) to install/set up charging infrastructure across India.”

Dr. Amitabh Saran- Founder and CEO Altigreen

There are two changes that we think would benefit the sector as a whole. The first is bringing about uniformity of GST for battery swapping. Though EVs are in the 5% category, battery swapping service is at 18%. Bringing about this uniformity would ensure a level playing field for the technology as well as quicken the rollout of EVs. Secondly, as with PLI on Advanced Chemistry Cell (ACC), there could be a similar one on the manufacturing of electronic components for EVs in India. Currently, a lot of these components are being sourced from outside the country and this increases costs while leaving the supply chain vulnerable to shocks. For India’s EV sector to establish itself for the future, ensuring localization of components is key.

Mr Ankit Mittal, Co-founder and CEO of Sheru

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“There are a host of expectations by the players in the electric vehicle sector from the government in the Union Budget 2023, including an extension of the Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME-II) scheme beyond 2024 and a substantial reduction of goods and service tax (GST). Under FAME-II, PLI (production-linked incentive) schemes totalling Rs 44,038 crore were announced during Budget 2022-23, including for ACC batteries. The industry stays optimistic that the government will consider reducing the GST on Advanced Chemistry Cell (ACC) batteries on par with EVs. To further enable a faster penetration of electric vehicles on Indian roads, the government needs to focus on lowering interest rates for EV financing and standardized residual battery value calculation. The government should also consider focusing on creating awareness about the vehicle scrappage policy to encourage the phasing out of end-of-life vehicles and drive EV sales. Considering the lack of enough charging points in the country, the 2023 budget should be focused on drafting strategies to create a robust EV battery charging infrastructure in the country with specific grants for research and development (R&D) of advanced batteries.” 

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Mr. Nitin Kapoor, Managing Director of Saera Electric Auto Private Limited

“Overall there has been an increase in the adoption of electric vehicles in India, especially in the 2W, 3W, and 4W segments. The Government is undertaking several measures to achieve significant electrification by 2030 (E3 India). With the Union Budget 2023-24 approaching, we believe that increasing the scope of FAME-II in terms of extended timelines and on vehicle categories instead of battery capacity will help in building a strong foundation for the commercial EV segment in India. There is a much-needed intervention in CGTMSME scheme with an increase in the loan amount to support ‘early stage’ startups. Reduction of EV interest rates for customers and bringing in ease in GST refunding process needs to be considered, this will only boost the 3W and 4W EVs benefitting and encouraging Fleet Owners to operate efficiently without any bottlenecks. Additionally, evaluating SEZ (special economic zone) for electric vehicles offering low-cost land and building infrastructure is an impetus to stimulate the economy. We also believe that the ban on imports of CKD/SKD kits will only help in the growth of Indian companies”.

Mr. Namit Jain, Founder, and CEO, of Zen Mobility

A huge part of Initial adoption of most Electric Vehicles is being done through the leasing/ renting model. A lot of interesting business models have evolved in last few years. While govt is providing subsidies to push EV adoption there still is a huge need to relook at the GST being charged currently in the EV sector. This includes GST on leasing/renting to individuals as well as corporates. Also GST needs a major revamp when it comes to Charging As A Service, Energy As A Service & Vehicle As A Service models both for fixed battery as well as Swap battery services.

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Furthermore, companies with EV fleets need to be incentivised as they lead this change despite higher Capital costs of EVs & a need to setup captive charging infra as of now. EV taxis should be completely exempted from GST atleast for the next few years till a critical mass is reached.

Mr. Girish Nagpal, CEO and Co-Founder MetroRide

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