As India gears up for the Union Budget 2024-25, the electric vehicle (EV) industry has high expectations. With insights from industry leaders such as Mr. Devndra Chawla, MD & CEO of GreenCell Mobility, Mr. Samarth Kholkar, CEO & Co-Founder of BLive, and Mr. Aryaman Tandon, Managing Partner at Praxis Global Alliance highlight strategic measures to drive the growth and adoption of EVs across the nation. This story highlights the key areas where the upcoming budget must deliver to ensure a sustainable and vibrant EV market in India.

Devndra Chawla, MD & CEO, GreenCell Mobility emphasizes the need for permanent viability gap funding for financially pressured State Transport Units (STUs) and developing a payment security mechanism to reduce lending risks and improve credit offtake. “It is crucial to secure an infrastructure sector tag for financing electric mobility projects and propose a capital expenditure subsidy for private bus operators deploying e-buses on intercity routes,” he states. Categorizing electric mobility loans as Priority Sector Lending and introducing incentives for battery recycling are vital steps towards lowering interest rates and promoting sustainability.

To foster a conducive environment for EVs, Mr. Chawla highlights the importance of standardizing green energy open access rules, toll exemptions for electric buses, optimizing charging costs through regulatory measures and opening government electric bus depots to private players. The ongoing success of the FAME subsidy, particularly FAME II, with a ₹10,000 crore budget, underscores the need for a FAME-III scheme to further enhance EV adoption. “The government’s commitment to boosting manufacturing and exports is evident through PLI Schemes for Automobiles, Auto Components, Advanced Chemistry Cell (ACC), and Battery Storage. A 5% GST on lithium-ion batteries, EV spare parts, and components, alongside correcting the inverted duty structure in EV production. Standardizing battery switching and tackling low-cost finance difficulties are critical for long-term growth,” he asserts. The government’s achievements in alternate fuels, renewable energy, and manufacturing through PLI programs such as the Biofuel Policy & National Green Hydrogen Policy highlight the importance of these projects.

Samarth Kholkar, CEO & Co-Founder, BLive stresses the need for a robust government policy to incentivize manufacturers, individuals, and the larger ecosystem. “Subsidies, tax benefits, lower GST rates for EVs, and making EVs more accessible to the larger public are essential,” he says. The development of a widespread and reliable charging infrastructure is equally important, particularly in urban areas and along highways, to address range anxiety issues. Kholkar also highlights the need for better financing options, including affordable loans and flexible financing schemes, to support consumers in making the switch to electric vehicles. “Establishing a strong resale market with standardized valuation models will enhance customer confidence and support long-term adoption of EVs,” he adds.

Aryaman Tandon, Managing Partner at Praxis Global Alliance, underscores the significant growth in the EV market driven by government initiatives such as tax incentives, public charging infrastructure, and the PLI scheme for local manufacturing. “To reach the ambitious target of 30% EV penetration by 2030, continued government support is essential,” he asserts. Expanding the FAME scheme to include private buses and commercial vehicles, reducing customs duties on imported EV components, and supporting local R&D in battery technology are critical steps. Simplifying the GST structure on EV components and batteries will further reduce costs and make EVs more accessible to consumers.

The Union Budget 2024-25 is poised to play a pivotal role in shaping the future of the EV industry in India. By addressing financial stability, infrastructure development, manufacturing support, tax benefits, and robust policy incentives, the government can drive significant growth and adoption of electric vehicles. The insights from industry leaders highlight the crucial need for strategic investments and comprehensive initiatives to ensure a sustainable and vibrant EV market. As the nation looks forward to the budget, the focus remains on creating a greener and more sustainable future for all.