As the countdown begins for the unveiling of the 2024 Indian Union Budget, the electric vehicle (EV) industry is abuzz with expectations and anticipations. The pre-budget landscape reflects a dynamic intersection of innovative ideas and strategic visions, as industry experts share their insights on what they hope to see in the upcoming fiscal plan.
From pivotal policy changes to incentives that drive sustainable mobility, these pre-budget expectations provide a glimpse into the aspirations of the EV sector. Let’s delve into the perspectives of industry leaders who are shaping the future of electric mobility in India and explore the transformative measures they envision in the forthcoming budget.
“As the Union Budget 2024 approaches, we anticipate pivotal measures to propel the Electric Vehicle (EV) industry forward. We strongly support a positive change in the Goods and Services Tax (GST) rules, especially urging a lower tax rate for Electric Vehicles (EVs) and their parts. This adjustment won’t just make EVs more affordable but will also encourage more people to embrace electric transportation, aligning with our country’s goal of sustainable and eco-friendly travel. Furthermore, We hope the government extends and strengthens the support for the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) scheme. Keeping this scheme going is crucial for the continued growth of the Electric Vehicle (EV) ecosystem.
In addition, we look forward to insights on the much-anticipated FAME III scheme. A well-defined roadmap in this regard would provide manufacturers with clarity, enabling strategic planning and fostering investor confidence. The seamless transition from FAME II to FAME III is essential for the industry’s progressive trajectory, and we hope the budget will provide a comprehensive vision for the future of electric mobility. With the rising pollution levels among the major cities in India, we need faster adoption and promotion of EVs as a sustainable alternative.”
Mr. Pratik Kamdar, CEO & Co-Founder of Neuron Energy
“As anticipation builds for the upcoming finance budget, the electric vehicle (EV) industry is poised for transformative reforms. Advocating for a streamlined Production-Linked Incentive (PLI) scheme, stakeholders seek clarity in provisions to encourage investment and growth. The call extends to widening the scope of the FAME II scheme, fostering innovation in diverse EV segments.
A crucial focus lies on incentivizing inbound technology transfer and manufacturing capabilities, positioning India as a global EV technology hub. Anticipating the central role of lithium-ion batteries, we urge GST reform for increased cost competitiveness. Charging infrastructure development, especially through public-private partnerships, is deemed pivotal for accelerated EV adoption.
Moreover, the promotion of universal battery charging and swapping infrastructure aims to simplify the user experience and standardize EV charging. The forthcoming budget is anticipated to lay the foundation for a sustainable, technology-driven future in Indian mobility, aligning with global EV trends.”
Mr. Nikhil Bhatia, Co-Founder & Chief Strategy Officer – HOP Electric Mobility
“One of the most anticipated schemes to be continued is the FAME II subsidy (Faster Adoption & Manufacturing Electric Vehicles). This subsidy was announced in 2019 having a validity for 3 years. It is expected that the govt will continue this for the next few years in response to decarbonising the environment and achieve the targets of net 0 goals.
Along with this, there is a proposal to reduce the GST on the Li-ion batteries from 18% to 5% overall, reducing the cost of acquiring EVs. Since batteries are a major cost component in EVs, the move to reduce the cost of batteries will make the product more lucrative for buyers.
Over the past 5 years, the government has focused a lot on building strong infrastructure. It is expected to continue improving and make efficient investments in energy, especially green energy and sustainable energy. The focus is on transitioning from carbon-dependent to energy-efficient policies. The new transport policies being adopted by the state govt are a testament to this shift. Many state transport authorities have announced the conversion of Petrol/Diesel cabs be converted into EVs by the end of this decade.
We look forward to EV financing getting priority sector lending status as the government’s ambitious target of 30% penetration to be achieved by 2023.”
Mr. Mayank Bindal, Founder & CEO, Snap E Cabs
“We at e-Sprinto eagerly anticipate Union Budget 2024, recognizing the undeniable surge in electric vehicle (EV) demand in India. With EV sales doubling from 2022 to 2023, reaching 89,137 units, the momentum is clear. To complement this growth, we urge a reduction in GST on lithium-ion battery packs and cells from 18% to 5%. Such a move will incentivize OEMs, fostering innovation and affordability in the sector. Additionally, the continuation of the FAME II Subsidy beyond its March 2024 expiration is crucial to sustain customer acceptance and support OEMs. Moreover, compulsory adoption of global ISO norms for battery swapping should be mandated by integrating voluntary IS standards into the Central Motor Vehicle Rules. This step will ensure quality assurance and uniformity in the EV industry, elevating standards for all stakeholders involved in the electric vehicle ecosystem. A forward-looking budget will not only propel the EV revolution but also solidify India’s position as a leader in sustainable mobility.”
Mr. Atul Gupta- Co-founder & Director at e-Sprinto
“Despite last year’s commendable 33% surge in EV registrations, our industry encounters persistent challenges. Chief among these hurdles is the imperative need for robust charging infrastructure, pivotal in inspiring confidence among potential buyers and propelling the widespread adoption of electric vehicles (EVs) as a sustainable mode of transportation.
Another barrier remains the relatively higher initial cost of EVs, often deterring consumers. However, the promise of life tax subsidies for electric vehicles and the availability of accessible EV financing options hold immense potential to mitigate this challenge.
The integration of EV infrastructure into Priority Sector Lending (PSL) is poised to bolster credit flow into the sector by mandating financial institutions to provide support, thus promising a significant boon.
A supportive regulatory framework coupled with financial incentives aimed at fostering research and development within the EV sector stands as an indispensable pillar. These measures not only drive innovation but also attract investments, creating an environment conducive to widespread EV adoption.
Ultimately, these strategic initiatives play a pivotal role in establishing an enduringly sustainable and eco-friendly transportation ecosystem.”
Mr. Manideep Katepalli, Co-Founder at BikeWo
“The upcoming budget holds a pivotal role in steering India towards a sustainable future by fostering the growth of battery recycling. The circular economy’s cornerstone, battery recycling, addresses mineral scarcity and reinforces our supply chains, paving the way for self-sufficiency in battery materials. While regulations like the Electronics Waste Management Rule and Batteries Management Rule have strengthened the recycling industry, persistent challenges call for solutions. To further empower this sector, streamlined recycling policies and incentives for pioneering waste management solutions are imperative.
The rapidly growing adoption of electric vehicles is a catalyst for the EV battery recycling industry. Initiatives such as FAME, PLI, and other incentives should be amplified to fuel this momentum. A tailored PLI scheme dedicated to lithium-ion battery recycling will be a game-changer, amplifying the sector’s growth while advancing India’s sustainability goals. As we approach the budget, investing in these strategic measures will not only invigorate the recycling industry but also cement India’s position as a global leader in sustainable practices.”
Mr. Rajesh Gupta, Founder & Director at Recyclekaro
“The government at the center has a lot of focus on the growth of the EV Industry as a whole, but the same commitment needs to be showcased by the state governments as well. For example, in Gujarat, we are paying double RTO charges as compared to other states for the EV vehicles which makes it an expensive as well as a less preferred option. There should be standardised norms all across the states for equal opportunities of growth pan India.”
Pragya Mittal, Co-Founder and Director at EVIFY
“In anticipation of the upcoming budget, the Electric Vehicle (EV) industry in India is fervently advocating for crucial measures to sustain and enhance the sector’s growth. With the imminent expiration of the FAME II subsidy program in March 2024, there is a collective call from stakeholders to extend it, ensuring ongoing efforts to enhance the affordability and accessibility of electric vehicles for consumers. Extending the program would not only solidify support for the EV industry but also align with the government’s ambitious target of achieving 30% electric vehicles on Indian roads by 2030. Complementing this extension, the industry is hopeful for a significant reduction in the GST on lithium-ion battery packs and cells from 18% to 5%. Such a revision would substantially alleviate manufacturing costs, enabling manufacturers to offer EVs at more competitive prices, and further encouraging consumer adoption. Additionally, stakeholders are seeking a standardized policy for the battery-swapping market. The current fragmentation and varied battery types across different players have led to compatibility challenges and safety concerns, including incidents of fires at swapping stations due to inferior batteries. A standardized policy specifying the type of battery pack, cell, dimensions, and connectors is expected to enhance safety and streamline charging infrastructure, fostering a more reliable and secure environment for EV users.”
Managing Director – Mr. Chakravarthi C.
“In anticipation of the upcoming budget, I envision a transformative leap for road safety in India. I strongly believe our country needs infrastructure and livelihood upgrades of the roadside emergency assistance providers. Today we have close to 8000 recovery trucks which are also aging and our county would need at least 20000 recovery trucks to ensure a faster mobilisation of accidental and broken vehicles. Probably we are the only developing nation in the world whose emergency roadside assistance doesn’t have recuse helicopters. This is all due to the least budget allocation and reduced focus. I would wish the government to bring guidelines that direct every automobile manufacturer to earmark 1% of the total price of the vehicle to the emergency assistance fund to ensure 3 years of such support ecosystem. With Budget 2024 as the catalyst, let’s propel India into a new era of road safety, where collaboration and consciousness reign supreme. Together, let’s make this vision a reality!”
Mr. Vimal Singh SV, Founder & CEO, ReadyAssist
“As we anticipate the upcoming Union Budget, our expectation is for a forward-looking and inclusive approach towards Electric Vehicle (EV) component localization. We urge the government to introduce comprehensive financial incentives and subsidies, including tax breaks, grants, and low-interest loans, to encourage domestic manufacturers in their research, development, and production of EV components. A clear and supportive regulatory framework that prioritizes local sourcing in EV manufacturing is crucial for stimulating localization efforts and establishing a competitive domestic supply chain.
We look forward to investments in workforce development programs and educational initiatives focused on EV technology, addressing the skills gap and ensuring a skilled workforce for component production. The allocation of funds for building charging infrastructure and implementing policies that promote EV adoption will drive demand for locally produced components, creating a conducive environment for domestic manufacturing.
Furthermore, we hope for proactive engagement in international collaborations to access global best practices and technological advancements, facilitating knowledge transfer and enhancing our competitiveness in the global EV market. A strategic and collaborative effort between the government, industries, and educational institutions is essential to achieve 100% EV component localization and foster sustainable growth in the automotive sector.”
Mr. Sumit Aneja, Founder, Speedways Electric
“The electric vehicle (EV) industry in India has gained momentum thanks to the government’s efforts in promoting EV adoption through various initiatives. However, we see untapped potential, and the upcoming budget could further boost the industry’s development.
Firstly, we expect the government to continue offering incentives and subsidies for manufacturing and purchasing EVs. These measures effectively drive demand and lower upfront costs. Extending these incentives and reducing import duties on EV components can make electric vehicles more affordable for everyone. Additionally, a critical focus should be on establishing a widespread charging infrastructure network nationwide. Insufficient charging stations are a concern for potential EV buyers. Allocating budget funds for strategically locating charging stations on highways, in cities, and in residential areas is essential.
Furthermore, the government should prioritize research and development in the EV sector. Continued investment in advanced technologies, like battery technology and energy storage solutions, is crucial for long-term growth and sustainability. Provisions in the budget supporting innovation and collaboration between industry players and research institutions would be beneficial.
In conclusion, the potential of the EV industry in India is significant, and the upcoming budget can play a pivotal role in realizing this potential. Through incentives, developing charging infrastructure, and investing in research and development, the government can further stimulate the sector’s growth. Delta is committed to contributing to the EV industry’s development and eagerly anticipates the budget announcement.”
Mr Niranjan Nayak, MD, Delta Electronics India – Charging Infrastructure Solution
“I eagerly anticipate the upcoming budget with optimism and a fervent hope for increased support towards the electric mobility sector. The extension and enhancement of the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme would be instrumental in propelling India towards a sustainable and eco-friendly future. Substantial subsidies for electric vehicles and related infrastructure would not only incentivize consumers but also bolster the growth of our industry. These measures will not only promote cleaner transportation but also stimulate innovation and job creation. I look forward to a budget that recognizes the pivotal role electric mobility plays in achieving environmental goals and economic development, and I trust that the government will continue to foster a conducive ecosystem for the electric vehicle industry to thrive.”
Mr Hyder Khan, CEO, Godawari Electric Motors (EV two-wheeler and three-wheeler OEM)
“Prioritizing the electric vehicle (EV) sector is crucial for a sustainable future. First, inclusion in the priority lending scheme will fuel growth by facilitating easier access to capital. To accelerate the adoption of EV-led delivery services, a reduction in GST for EV services from 18% to 5% is imperative. While EV purchases enjoy a 5% GST rate compared to 28% for internal combustion engine (ICE) vehicles, a similar distinction must extend to services. Furthermore, introducing usage-based incentives for EV drivers, in addition to existing FAME buyer incentives, will be a game-changer. Rewarding users based on carbon savings and kilometers driven creates a tangible incentive for sustainable choices.
Addressing the last-mile delivery gap is equally critical. Recognizing last-mile delivery as a distinct sector under logistics policies is essential, given that one-third of shipments fall within this category. Establishing industry standards, supporting gig delivery partners with tailored schemes, and implementing standard operating procedures (SOPs) will enhance efficiency and foster growth in this vital but often overlooked segment of the logistics industry.”
Mr Akash Gupta, Co-Founder and CEO, Zypp Electric- Last Mile EV logistics
“As we navigate the dynamic landscape of the EV sector in 2024, we anticipate a strategic budget allocation that reflects our commitment to sustainable mobility. Our financial plan underscores not just numbers, but the human impact of driving innovation. With a focus on fostering talent, community engagement, and responsible growth, our budget embodies the essence of progress that goes beyond the balance sheet. Together, let’s power a future where humanity and technology coexist harmoniously, driving positive change in the world.”
Kaustubh Dhonde, Founder and CEO of AutoNxt Automation
“As the electric vehicle (EV) industry gears up for substantial growth in the coming years, it is imperative for the government to foster a supportive ecosystem. To stimulate investment opportunities, there should be encouragement for potential investors, coupled with essential reductions in GST rates for electric vehicles and charging stations. Additionally, easing the burden on the industry can be achieved through a decrease in import duties on electronic components. The industry is particularly hopeful for a significant GST reduction, aiming to bring it down from 18% to 5% specifically for lithium-ion battery packs and cells, given their pivotal role in the EV sector. A concerted effort in the budget towards enhancing the ease of doing business and facilitating the entry of local players into the market is crucial. Addressing aspects like component localization and ensuring easy access to necessary components will empower Indian companies, both large and small, to develop competitive products at competitive prices, further solidifying the sector’s growth potential.”
Dinesh Arjun, Co-founder and CEO at Raptee Energy
“Contributing significantly to the economy, the Electric Vehicle industry has demonstrated a sizeable potential to strengthen the economic growth and progress of the country. As we look towards the upcoming Interim Budget 2024, we expect the honourable Finance Minister Nirmala Sitharaman will revisit GST rates on the vital spare parts of the EVs besides extending the Faster Adoption and Manufacturing of Electric Vehicles (FAME) subsidy scheme for widespread adoption of EVs which offer environmentally friendly and sustainable transportation solutions.”
Dr Darshan Rana, Chairman and Managing Director, Erisha E Mobility Private Limited
“As India grows to become a $5 trillion economy, inspired by our Honourable Prime Minister Shri Narendra Modiji’s ‘LiFE: Lifestyle for Environment’ mantra at COP26, we see a timely opportunity to shift the paradigm of our personal mobility. Over the years, the government’s economic initiatives have increased disposable income, making it the right time to prioritise efficiency over size in personal mobility. Indigenous EV-cycles, powered by Indian technology, have the potential to redefine mobility, realising our dream of ‘har ghar ek electric cycle,’ reducing the country’s oil consumption similar to how LEDs transformed energy use. We anticipate the budget will further empower consumers to align choices with ‘Lifestyle for Environment,’ confident that India will lead in redefining personal mobility with EV cycles as the preferred choice in the coming years.”
Mr. Atulya Mittal, Founder, Nexzu Mobility
“The upcoming interim budget, coinciding with elections, will set the tone for the government’s future plans. The 2024 budget is crucial for aligning tire manufacturing and EVs, steering the industry toward innovation and sustainability. The tire industry hopes for strategic allocations that drive innovation in durable and eco-friendly tires. Simultaneously, the EV segment would expect incentivising development of the ecosystem, including charging infrastructure investments, and research support, fostering a greener automotive landscape.”
“India faces challenges in rubber production, with high duties on natural rubber. Adjusting duty rates is vital for cost competitiveness. Rising raw material costs and reliance on imports impact profits. Encouraging research, local sourcing under ‘Make in India,’ and adjusting duty structures will boost global competitiveness and sector resilience.”
Mr. Harinder Singh – Managing Director & CEO, Yokohama India
