As India stands on the brink of its 2024 Union Budget announcement, anticipation is mounting across various sectors, especially within electric vehicles (EVs). The budget is expected to play a pivotal role in shaping the future of this industry, driving innovation, sustainability, and economic growth. Key stakeholders, including CEOs and industry leaders, have voiced their hopes and expectations, emphasizing the need for supportive policies, fiscal incentives, and strategic initiatives. These insights underscore a collective desire to see the government prioritize green mobility and renewable energy, reinforcing India’s commitment to a sustainable and self-reliant future.
Dinesh Arjun, Co-founder and CEO of Raptee Energy highlighted the need for a supportive ecosystem to stimulate the EV industry’s growth. Arjun advocated for reductions in GST rates for electric vehicles and charging stations and called for 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% for lithium-ion battery packs and cells,” he noted. Such measures would enhance the ease of doing business and support local players in developing competitive products.
Mr. Ravi Machani, Co-Founder and Investor at Tresa Motors, emphasized the high expectations of the EV industry from the upcoming budget. He commended the government’s previous efforts to support EV manufacturing and infrastructure and called for intensified commitments to green mobility and “Make in India” initiatives. Machani stressed the importance of creating a robust ecosystem for EVs in India, focusing on domestic production and a reliable supply chain for EV materials. He also highlighted the need for incentives for heavy commercial vehicles (HCVs) to transition from diesel-powered to eco-friendly electric alternatives.
Mr. Ashok Vashist, Founder and CEO of Wise Travel India Private Limited, underscored the importance of directing subsidies towards operators who utilize EVs extensively. “Subsidies should reward those who actively contribute to reducing emissions and promoting sustainable mobility,” Vashist argued. He hopes the budget and FAME 3 will prioritize operators demonstrating a commitment to sustainability over those merely purchasing EVs for show.
Mr. Sumeru Shah, Business Head for Electric Two-Wheelers at Ecofy, shared that the prevailing sentiment in the industry is a focus on mass/public transport vehicles rather than personal use under FAME 3. Shah mentioned that OEMs are introducing more affordable models to boost adoption and affordability. He also noted the potential introduction of new subsidies for vehicles using alternative fuels, such as hydrogen, which could further boost the adoption of non-fossil fuel vehicles.
Mr. Aditya Singh Ratnu, Co-Founder and CEO of ZEVO, highlighted the significant progress of India’s EV industry, driven by the government’s FAME-I and FAME-II initiatives. He called for the inclusion of electric two-wheelers under the FAME subsidy umbrella, which would reduce manufacturing costs and encourage investment. Ratnu is optimistic about the anticipated FAME-III scheme, which is expected to support electric two, three, and four-wheelers with a substantial budget allocation.
Mr. Pratik Kamdar, CEO and Co-Founder of Neuron Energy expressed high hopes for the upcoming budget following the Modi government’s historic third-term win. Kamdar anticipated progressive measures to encourage domestic production and a uniform 5% GST on all EV spare parts. He emphasized the need for FAME-III to adopt a cohesive strategy to accelerate EV adoption and called for subsidizing financing options and reducing GST on batteries to make EVs more accessible and affordable.
Mr. Dhanpal Jhaveri, Vice Chairman of Everstone Group and CEO of Eversource Capital, for the upcoming budget, several initiatives are proposed to accelerate e-mobility. Firstly, mandating national and state highways to transition to e-highways with ultra-fast charging parks will expand the charging network. States should be incentivized to provide renewable energy for EV chargers, enabling net-zero mobility. Classifying green loans for EVs under PSL will enhance funding. PLI schemes for fast chargers and viability gap funding will support infrastructure development. Regulators should allow financiers to access borrowers’ earnings data to improve loan underwriting. Including EVs in the Carbon Trading Mechanism and offering concessional electricity tariffs for EV charging will further boost adoption. Lastly, incentives for battery recycling and standardizing safety and product certifications are crucial for sustainable growth.
The upcoming 2024 Union Budget holds significant promise for India’s EV sectors. Industry leaders have articulated their expectations, emphasizing the need for policies that support innovation, reduce financial burdens, and encourage widespread adoption of green technologies. As the government continues to champion sustainable growth, the budget’s outcomes could propel India towards its climate goals, enhancing energy security and economic resilience. The collective call for robust support mechanisms and fiscal incentives highlights the sector’s readiness to contribute to a greener future. With the right measures, the 2024 budget can solidify India’s position as a global leader in green mobility.
