Union Budget 2023-24: Reactions From The EV Industry Experts

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This is undoubtedly a future-looking announcement which will help India to become one of the prominent players in the green hydrogen space and thus reducing the dependency on lithium. With the budget allocated to the energy transition, we will see a lot of businesses turning to EV fleets. A green credit system will ensure that the startups and MNCs who is working for making the planet a sustainable place to live are incentivized.

The viability gap funding will ensure that new battery tech will get supported in the early days before it attains economies of scale.

Customs exemption on capital goods and machinery for lithium batteries will reduce the per kilowatt-hour cost of batteries and thus accelerate EV adoption in both personal and commercial segments.

Visakh Sasikumar, CEO & Co-founder, Fyn mobility

The Union budget clearly shows the commitment of the central government to achieve the net zero emission goal of 2070. The budget expectations that we had from EV industry perspective will completely be met if the implementation of the budget is done properly at the grass root level. Both the incentives and packages defined for Agritech and EV-related innovations in the country are truly promising to expect high growth from the rural to the urban areas. 

Startups/MSME’s working in these two areas are the real catalyst for the growth of the entire nation, so it will be interesting to look at how smoothly they are provided access to the benefits announced in today’s budget. After listening to the budget today, we can say that India as a nation is truly spearheading the innovation required to fight climate change in all sectors and it is hardly a matter of a few years now when India will be know as the leader in making the right efforts to save the planet from the climate change challenges it is going through, exactly like now it is known for saving the world from the threat of covid by supplying the vaccines.

Mr. Kaustubh Dhonde, Founder & CEO of AutoNxt Automation

The emphasis on green growth and net-zero emissions is the need of the hour as outlined in the Union Budget. The outlay of 35,000 crores for priority capital investments towards energy transition and net-zero goals will boost energy security in India. Further, the decision to support Battery Energy Storage Systems with a capacity of 4,000 MWH with viability gap funding will give a huge impetus to the clean energy sector. One of the most impactful decisions this time is the extension of customs duty exemption for import of capital goods and machinery required to produce lithium-ion batteries for EVs in India. This move will reduce the initial capital investment needs for the battery manufacturers and is also likely to make the batteries become cheaper as there will be a larger manufacturing base for them. Concession on duty on lithium-ion cells import for EV batteries has also been extended for another year, which would lead to greater EV adoption in 2023. Similarly, basic customs duty exemption on raw materials required for manufacturing of nickel cathode used in the batteries has also been continued.

Improving the ease of doing business by reducing 39,000 compliances, and the decision to provide greater funding to state governments to replace old polluting vehicles are also welcome steps. It is expected that these old vehicles will be replaced with EVs and that would improve their adoption in the country. The establishment of 100 National Skill Development Centers will ensure that a larger number of youth across India are trained on advanced technologies and made ready to work in the climate-tech sector. All these are great initiatives, and if this momentum is further supported by the unveiling of the final draft for the Battery Swapping Policy, we will be able to witness accelerated growth of clean mobility in India.

Mr. Varun Goenka, CEO & Co- Founder, Chargeup

The Union Budget for 2023-2024 has a strong focus on green growth and sustainability. The “Green Growth” priority sector is a step towards India’s resolve to achieve Net Zero by 2070. The government has granted infrastructure status to the EV sector, paving the way for easier access to credit for companies making EV components. This will reduce production costs and help expand India’s manufacturing capabilities in this sector. The scheme announced to scrap old vehicles and replace the old polluting vehicles will encourage more people to switch over from petrol/diesel cars to electric ones. The Indian Government is committed towards introducing green mobility solutions such as e-rickshaws, e-bicycles, and other clean energy transport systems in cities across the country with an emphasis on green growth with focus on green fuel. We are delighted to see such initiatives included in the Union Budget 2023. 

Mr.Tushar Choudhary, Founder & CEO, of Motovolt Mobility

We welcome the Union Budget 2023-2024’s strong emphasis on green growth and sustainability. This budget will be used to encourage investments in renewable energy sources, reduce carbon emissions, and increase energy efficiency. One of the key aspects of this is the launch of a Rs 2,200 crore Aatmanirbhar clean plan program. This is a clear indication of the government’s commitment to reducing India’s estimated total carbon emissions by 1 billion tonnes by the end of the decade. The government’s aspirations to achieve net-zero carbon emissions by 2070 and reduce the country’s carbon intensity by 45% by 2030 are also significant steps in this direction. The government plans to develop an integrated sustainable development system that includes measures such as electric vehicles, waste management systems, water conservation projects, and solar power plants. Furthermore, the budget also promises increased funding for research and development of clean technology solutions including green hydrogen production facilities. The government’s decision to exempt excise duty on GST-paid compressed biogas containment will give a boost to the green mobility sector. Also, custom duty exemption on the import of lithium-ion batteries will continue to focus on the transition to electric mobility. Overall this Budget will help India achieve its commitment to a low-carbon economy while achieving economic growth at the same time. It is expected that these initiatives will help create employment opportunities as well as attract foreign investment into India’s economy.

Mr. Ankit Kedia, Founder & Lead Investor, Capital A

It is good to see “Green Growth” among the 7 priority areas announced in the budget by the FM. Rs 35,000 crore has been allotted for priority capital investment in the green energy transition. This is in the direction of India seeking a leadership role in mitigating the global climate crisis.

India plans to electrify 70% of commercial vehicles, 30% of passenger cars, and 80% of the total 2Ws and 3Ws by 2030. Our Li-ion battery demand is currently 3 GWh and is set to grow to 70 GWh by 2030. At present, we are importing almost 70% of our Li-ion cell requirement from China and Hong Kong. With customs duty exemption being extended to the import of capital goods and machinery required for manufacturing of lithium-ion cells for batteries used in EVs, the government is clearly encouraging local cell manufacturing in the country and reduce dependency on imports.

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Complementing this with steps such as tax subsidies and the development of special economic zones/lithium parks across the country to promote investments in raw material refining and cell manufacturing capacities and continued PLI schemes and subsidies for cell manufacturing will be key.

The FM also announced the viability gap funding for battery energy storage systems with a capacity of 4,000 MWh (megawatt hour). Along with the usage of energy storage systems by residential, commercial, or industrial consumers, it is also important to think about a framework to give a push to the battery swapping network for electric vehicles during off-peak periods.

However, there was no mention of any extension to the FAME scheme which is set to expire by Mar’24. It is important to continue the scheme for a few more years to sustain the growth momentum until we reach an inflection point and gain critical mass for electric vehicles.

Harsha Bavirisetty, Co-Founder of Biliti Electric

Being a prominent player and a visionary in the electric vehicle space, we are thrilled with the government’s commitment to promoting environmental sustainability through the continuation of concessional duties on lithium-ion cells for batteries. This move not only shows the government’s dedication to reducing the carbon footprint but also recognizes the importance of the EV industry in creating employment opportunities and promoting green growth.

The growth of the EV industry has been nothing short of phenomenal, and with the support of the government, it is poised for even more substantial growth. This budget announcement is a clear indication that the government recognizes the potential of the EV industry and is committed to supporting its growth. I am confident that this support will go a long way in fostering innovation and development within the industry. It will also provide a much-needed boost to the development of charging infrastructure and other essential components of the EV ecosystem.

In conclusion, with the promising announcements made in this budget, we are excited about the future of the EV industry and I am confident that with the government’s support, the way forward for players like us will be a smoother ride.

Mr. Irfan Khan, Founder, and CEO of eBikeGo

We are firmly aligned with the Government’s vision of ‘Amrit Kaal’ which includes a technology-driven, knowledge-based sustainable economy. For the vision of 2070 Net-Zero CO2 Emission, investment in the energy transition will play a crucial role. We at Delta have already implemented many programs for reducing carbon emissions and signed up for many sustainable initiatives like RE100, net zero, green products, etc. for a greener tomorrow. Also, all our product offerings are energy-efficient and green solutions that aid in achieving the overall nation’s carbon footprint reduction targets ranging from power quality improvement products to green EV charging solutions, etc.

The Budget 2023 further focus on sectors that include setting up labs for developing applications using 5G services, railways, and enhanced focus on the smart city infrastructure to keep the economy on steady growth, these are progressive measures and we feel that they will play a critical role for us to become key contributors in these areas and further development. The budget has particularly emphasized on efficiency and sustainability as the key driving forces in the coming years and let all key stakeholders identify and utilise these opportunities to drive the robust growth agenda of the country.

Mr. Niranjan Nayak, MD, Delta Electronics India

The budget has taken Green Growth as one of the Pillars of the economy for the coming financial year. Programs for green fuel, energy, mobility, and equipment have been announced. These initiatives will help create new Investments and Jobs in the Clean Energy sector, of which the EV sector is an important part.

The outlay to the National Green Hydrogen Mission for 19700 crores is also a step in the right direction as it helps create the eco-system for a completely new Green Energy paradigm.

The announcement of Viability Gap Funding for Battery Energy Storage is a recognition of the criticality of Energy Storage as a core Infrastructure.

Custom duty exemption has been extended to the capital goods and machinery required to manufacture lithium-ion cells in EV batteries. This is going to be a big push for enabling the localization of Cell Manufacturing.

We also see other initiatives like incentivizing Municipal Bonds and the Urban Infrastructure Development Fund (UIDF), which will help create new Urban Infrastructure, of which Clean Mobility Infrastructure will be a crucial part.

We would like to see more being offered in terms of incentives for the entire EV Infrastructure sector. As I have said, India could quickly become the global Hub for EVs, and we would have liked to see more incentives to encourage domestic manufacturing in the sector.

Arjun Sinha Roy, Co-Founder, iRasus Technologies.

For clean energy and e-mobility, Budget 2023 has several benefits that carry forward the momentum. Electric vehicles need further cost declines in battery and electronics to increase consumer uptake. The custom duty reduction on the import of capital goods and machinery for li-ion battery manufacturing and subsidy on the import of lithium-ion cells being extended by another year will ensure that this cost decline continues.

While clean energy has been rising rapidly in recent years, lack of storage and outdated transmission infrastructure has been slowing its growth. The budget addresses these through a large CAPEX allocation for modernising and strengthening the green power infrastructure. In addition to this, there is also viability gap funding for battery storage and 35,000 crores allocated towards green energy transition.

India’s mobility and energy sectors are witnessing rapid transformations and moving towards a zero-carbon future. Budget ’23 has provided a boost to aid that.

Mr Ankit Mittal, Co-founder and CEO of Sheru

We welcome the announcement made on Budget 2023-24, especially for the EV sector. One of the most significant announcements was the customs duty removal on capital goods imported for the manufacturing of lithium-ion batteries, which would eventually help reduce the cost of electric vehicles in the country. Indirect tax proposals by the government would boost green mobility and the electric vehicle sector in the country. In addition, support for viability gap funding for battery storage solutions with a capacity of 4,000 MWh and a reduction in customs duty on lithium-ion batteries for one more year will bring us close to a net-zero carbon emission goal by 2070. But the most significant step in this realm is the allocation of Rs 35,000 crore as priority capital investment towards energy transition and achieving net-zero carbon emission. This massive investment will emerge as fuel to India’s sustainable development goals and from providing acceleration to the EV industry. Furthermore, a scheme announced to scrap old vehicles and replace them with better ones, most positively with EVs, is a welcomed decision. The intention to encourage a zero-carbon strategy in the auto sector for the long term came out loud and clear in the budget. It will help OEMs to push for greener mobility solutions in the country and could facilitate the auto industry’s transition to cleaner mobility.

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

Union Budget 2023 was a potential inflection point for sustainable development, and I am glad that Green Growth was a key priority amongst the seven priorities for the union budget. The outlay of ₹ 35,000 crores as a priority capital investment for energy transition and net zero objectives to support the net zero carbon emission target by 2070 is in the right direction. However, what remains to be seen is how this allocation is laid out and how this gets disbursed, and via which agencies. The intention of notifying the Green credit programme under the Environment Protection Act will be one step to formalise the Green credit program, which is currently shrouded in ambiguity and hence not considered a positive impact on the business models.

The continuance of the concessional duty on lithium-ion cells for batteries for another year is a needed one for the fledgling Electric Vehicles and battery storage industry and will go a long way in increasing adoption via low cost of transition for the end user. From an MSME perspective, there are two key initiatives worth commending 1. the revamped credit guarantee from Apr 1, 2023, with an infusion of Rs 9,000 crore in corpus, and 2. the proposal of a new credit guarantee scheme to reduce the cost of credit by one percentage point. Overall, the budget has the heart in the right place for Green initiatives, but it is not path-breaking overall.

Mr. Maxson Lewis, Founder and Managing Director, Magenta Mobility

The Government’s fidelity to reduce carbon footprint in the country has been re-assuring in the Union Budget 2023. The push towards green mobility will propel the growth of the EV sector in India and will encourage further investments. To usher in a green industrial and economic transition, India is committed to achieving net-zero carbon emissions by 2070. With its focus on green growth and push for green mobility, this budget provides the much-needed impetus to the sector.

The Customs Duty exemption on capital goods and machinery to manufacture li-ion will be a facilitator for the country to transition to sustainable and eco-friendly mobility. The exemption will have a domino effect on the overall sector with the over substantial decrease in the overall cost of the finished products wherein the battery packs are likely to reduce by 5% coupled with lower initial investments. Additionally, the vehicle scrapping policy will also be beneficial if the old vehicles are replaced by electric vehicles. This will further aid in the country’s vision of mass EV adoption by 2030.

The sector also holds immense potential with regard to providing entrepreneurship opportunities and job creation. With decreased capital investments to manufacture ancillary supplies like li-ion batteries, it will provide a platform for new-age businesses and entrepreneurs to venture into the space.

Overall, we are confident that this Budget will aid in the country’s adoption to electric mobility significantly.

Mr. Pratik Kamdar, Co-Founder of Neuron Energy

The government’s decision to extend the concessional duty on lithium-ion cells for batteries for another year is definitely welcoming as it would sustain the ongoing momentum within the Indian EV sector. Considering EV batteries account for approx upto 60% of the EV cost, this relaxation will make electric vehicles more affordable and hence enhance the EV adoption rate.

Mr. Pankaj Sharma, Co-Founder & Director, of Log9 Materials

The Union Budget rightly builds incentives to support low-carbon development pathways with a focus on Green Growth among the Saptarishi priorities. Catalyzing sustainable growth in India will require incentives to drive investments in technology and innovation, to ensure that we do not have to make trade-offs between people and the planet. We welcome the increased outlay towards energy transition, particularly for Green Hydrogen and waste-to-energy, which will boost energy independence. The PRANAM scheme and bio-input centres shall incentivize the adoption of sustainable and regenerative agriculture practices. The Green Credit programme will channel much-needed capital to support the transition to a sustainable economy. Concessional duties on Li-ion batteries will provide a further boost to the EV sector and help decarbonize the transport and logistics sectors. The measures announced in Budget 2023 will further strengthen India’s position as a global climate leader, and catalyze sustainable, inclusive development.

Anjali Bansal, Founder, Avaana Capital

Electric mobility is the future, and policy support is essential for the growth of our EV ecosystem. The announcement in the Union Budget of extending concessional duty for lithium-ion cells will give an impetus to Indian manufacturers. With respect to the removal of customs duty on capital goods imported for manufacturing lithium-ion cells, this is a positive step, likely to benefit the Indian EV ecosystem in the long run. As we take strides towards achieving the Net Zero carbon emissions target by 2070, the continuation of such forward-thinking policies will be key to establishing India’s technology and manufacturing prowess on the world map.

Narayan Subramaniam, Co-Founder, and CEO, of Ultraviolette Automotive

This is an impressive and well-planned budget. The budget demonstrates the government’s commitment to green growth. They have clearly stated that this is one of their top seven priorities. The extension of subsidies for another year, as well as lower duties on lithium batteries, are encouraging developments for India’s transition to green mobility. The infusion of 9000 crores into the Credit Guarantee Scheme, combined with lower credit costs, is a much-needed boost for the MSME sector. References to ease of compliance, rationalization, and digitisation will improve the ease of doing business even further. Overall, the budget has prioritized green initiatives, and we are excited to contribute to making the world a greener and cleaner place for everyone.

Mr. Mayank Jain, Director – Crayon Motors

We are happy to see systemic measures from the government for faster adoption of electric vehicles.

The Budget has extended customs duty exemption for the import of capital goods and machinery required for manufacturing lithium-ion cells for batteries used in electric vehicles. This will help lower the landed cost of EVs for end consumers. Furthermore, the budget has laid emphasis on the vehicle scrapping policy with additional funds being allocated for the replacement of old vehicles. This will largely benefit the commercial vehicle segment by advancing the aid for sustainable and affordable options for EV transition.

Through the ‘green power initiative’, the government aims to move towards renewable energy alternatives which will further reduce the emissions from EVs on the road sourcing electricity from conventional sources. All these efforts will help our country achieve various SDGs such as combating air pollution, enhancing renewable energy, and more.

Sudhindra Reddy, Co-founder, Turno

We welcome Budget 2023-24 and the government’s dedication to promoting environmental sustainability, as stressed by Finance Minister Nirmala Sitharaman. The announcement of the extension of subsidies on Electric Vehicle batteries for 1 more year coupled with the decision to continue the concessional duty on lithium-ion cells for batteries for another year is helpful; however, we look to the government to extend these for 3 years to provide a stable policy environment for the industry.

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Dr. Amitabh Saran- Founder and CEO Altigreen

Finance Minister Nirmala Sitharaman has tried to stimulate the auto sector of India with some smart moves in the Union Budget 2023-24. First of all, this budget paves a smooth path for the EV transition by extending the customs duty exemption to import of capital goods and machinery required for the manufacture of lithium-ion cells for batteries used in electric vehicles. Whereas measures announced for skilling and research in AI, Robotics, 5G, Mechatronics, and 3D printing will trigger quality production across the sectors, the auto components industry will also benefit from incorporating these cutting-edge technologies in various operations. On the other hand, the rebate limit on personal income tax has been increased from ₹5 lahks per annum to ₹7 lahks per annum; this initiative will directly affect the demand side with the better purchasing power of potential customers. Moreover, the announcement of replacing old government vehicles will further enhance demand for new vehicles. So, overall it is a smart budget where due attention is given to all the major sectors.

Manav Kapur, Executive Director, Steelbird International

I applaud the government’s continued efforts to accelerate the country’s transition to sustainable development and green growth, focusing on green fuels, energy, and building practices, and creating new “green” jobs besides leading to reduced carbon intensity. The announcement of ₹35,000 crore budget for green transition allocation and the proposal of a zero carbon emission goal by 2070 are huge steps forward in promoting India’s progression towards green growth. However, the industry looks forward to the government to share more insights about the capex allocation to support the commercial vehicle sector as part of the green growth agenda.

It is also encouraging to see the government’s decision to announce viability gap funding for battery storage solutions and the continuation of lower customs duty on lithium-ion cells. The scrappage of old government vehicles and budgetary allocation towards the same is a positive step in the direction of the zero carbon emission goal.  

While this budget is impactful, I feel that release of the Battery Swapping Policy covering subsidies and GST rate rationalization from 18% to 5% on EV battery would have added further to the green growth agenda.

Chetan Maini, Co-founder & Chairman, SUN Mobility

We are pleased to see ‘Green Growth’ as one of the mission-critical objectives laid out in Union Budget 2023. As India transitions towards sustainable mobility, there needs to be a strong impetus on building a sustainable mobility ecosystem with clean technologies. This will require upskilling the existing human resources to green technologies. From using clean power in components and vehicle manufacturing to charging of vehicles to battery repurposing and recycling, there is a great opportunity to building requisite clean tech infrastructure for EVs. The investments in ‘Made in India’ EV components, besides products and innovations with give us better control of the entire carbon chain.

The outlay of Rs 35,500 crores in the energy transition will play a key role in the accelerated transition towards an all-electric ecosystem. Mobility is a sector poised to emerge as one of the prime drivers of net zero emissions. Greaves is one of the dominant players in building the EV ecosystem in India and we are strongly aligned to the ‘Green Growth’ efforts.  The country’s journey towards decarbonization gets further momentum with National Green Hydrogen Mission, as the Rs 19,700 crore capital outlay will reduce dependency on fossil fuels and encourage more innovations in use cases of clean energy and renewables.

Finally, the Union Budget 2023 paves the way for a favourable, positive, and stable macro-economic environment with economic growth pegged at a robust 7%, doubling of per capita income, positive tax reinforcements for the salaried class, and capex allocation of 10 lakh crore. This will stimulate the economy, revive consumer sentiments, and help boost purchasing power.

Mr. Nagesh Basavanhalli, Executive Vice Chairman, Greaves Cotton Ltd.

We are quite happy to see the government’s transition towards ‘Green Growth’. The custom duty exemptions on lithium-ion batteries in particular are quite encouraging for manufacturers. This will bring more small and medium players to the forefront with the resulting reduction in costs and stronger supply chains. Budget 2023 clearly seems to be a strong step towards a less carbon-intense economy.

Ranjita Ravi, Co-Founder of Orxa Energies

Excited to see the budget’s focus on green growth and the pro-EV initiatives, particularly the reduction of customs duties on lithium batteries and the extension of subsidies for EV batteries. These actions will drive demand for electric vehicles and align with the budget’s goal of promoting eco-conscious lifestyles. The policy to replace old, polluting vehicles will further accelerate the transition to EVs. Overall, a well-rounded, progressive budget that will encourage investments in the EV sector.

Lalit Singh- Chief Growth Officer, TelioEV

The Union Budget 2023-24 is pro-development, with sustainable planning; energy transition for a cleaner tomorrow, and inclusive growth through a tech-enabled economy at its core. Moreover, the impetus on the EV sector in the budget is quite encouraging for all Industry players.  Drawing from its core, the decision to exempt Lithium-ion cells of custom duties for another year is a welcome move, as its majorly impacts the affordability of EVs in India. Furthermore, the viability gap funding announced to support the Battery Energy Storage Systems, along with a framework of Pumped Storage Projects, is designed to reduce the revenue required to recover costs and offer better returns, especially for the Private sector.

Mr. Anshul Gupta, Managing Director, Okaya Electric Vehicles

We at Greta Electric Scooters heartily welcome the Budget the Honorable Finance Minister presented. While there is no major announcement for the EV sector, the Budget’s focus on green growth involving energy transition, achieving the net zero target of 2070, is encouraging for the industry. Initiatives will not only help reduce carbon intensity but will create employment. Exemption of customs duty is another welcome move.

Another element that resonated with me was the Green Credit Programme I believe this will add fuel to companies’ endeavour to adopt green practices, and it will contribute effectively to reducing our carbon footprint. Finally, the reduction in Income tax slabs is definitely something to cheer about.

Mr. Raj Mehta, Founder, of Greta Electric Scooters

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