For India’s auto industry, 2023 is expected to be the year of electric mobility. Electric vehicle (EV) players see an increase in adoption of electric vehicles in India especially in the 2W, 3W and 4W segment and with Union Budget 2023-24 just around the corner, EV companies are pushing for extending timelines for FAME II subsidy beyond 2024.
“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 CGT (Credit Guarantee Fund Trust) MSME (micro, small and medium enterprises) scheme with increase in the loan amount to support ‘early stage’ startups,” Namit Jain, Founder and CEO, Zen Mobility, said.
Jain added that 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 growth of Indian companies,” he said.
Another mass-market EV company, Motovolt is of the opinion that in order to sustain this momentum and make EVs compete with the conventional fossil fuel vehicles, it is critical that the government continues with its policies and schemes.
“The government of India has identified EVs as the key to achieving the sustainability goals of the India mobility sector. In the last few years, a number of steps have been taken to build an EV ecosystem comprising OEMs, battery manufacturers, energy providers and other stakeholders. The taxation on EVs and components like batteries must be lowered so that the vehicles can be made more affordable for the masses,” Tushar Choudhary, Founder & CEO, Motovolt Mobility, said. “For instance, the GST on Advanced Chemistry Cell batteries is expected to be reduced to 5 per cent which will make it at par with the GST on EVs," he added.
Choudhary said that there is a need to consider a tax subsidy for 2- wheelers akin to the 4- wheelers consumer finance for the low-speed category. Apart from this, the Delhi e-cycle subsidy must be rolled out to other metros as well.
“Electric 2-wheelers and e-bikes are ideal for the last-mile delivery services provided by food delivery platforms, ecommerce companies, and courier services etc. This pace of adoption can be accelerated by offering lower GST to operators who switch their fleets to EVs. At present the GST on such services is calculated at 18 per cent and lowering of this amount and offering green mobility incentives would be a welcome step,” Choudhary said.
EV company Evera said that over the past few years, the demand for climate justice for the future generations has gained momentum. “To make sure that our EVs are able to provide better services to our customers, partners and governments, we have planned a network of EV charging stations across primary locations across India. In the upcoming Budget, we expect the government to introduce policies/ schemes that further support EV car manufacturers and cab service providers,” Nimish Trivedi, Co-Founder, Evera, said.
Charging infrastructure is going to be an important factor in India’s EV growth story. In the last Union Budget, the finance minister announced the government’s plan to introduce a comprehensive Battery Swapping Policy. The draft policy was put up for opinion and EV ecosystem stakeholders like EV OEMs, battery manufacturers, and energy service providers, etc. have put forward their opinions and shared concerns related to some operational aspects.
“As a path-breaking initiative, the policy can transform and expedite the growth of the EV ecosystem if it is simplified on the lines of CNG policy by standardising only the battery and vehicle specifications and not the types. The simplification through the upcoming Budget should be followed by an early implementation as 2023 is a crucial year to build momentum,” Varun Goenka, CEO & Co- Founder, Chargeup, said.
Goenka added that the long-standing demands of including EVs in priority sector lending, and reduction of GST from 18 to 5 per cent need to be fulfilled through budgetary allocations. These measures will help reduce the upfront costs of EVs, and undoubtedly make them more affordable, leading to faster adoption across the country.
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