Electric Vehicles to get cheaper with reduction in GST, IT deduction and govt policies

For a better understanding of the state of EV acceptance in India and setting up & spread of charging infrastructure, we spoke with Maxson Lewis, MD, Magenta Power.

By: | Published: July 19, 2019 2:10 PM

India is pushing forwards with quicker adoption of electric vehicles with the government announcing policies and incentives for the manufacturers and the buyers as well. In the midst of development and launch of new electric vehicles, one major aspect that needs attention is EV charging infrastructure or the current lack of it. For a better understanding of the state of EV acceptance in India and setting up & spread of charging infrastructure, we spoke with Maxson Lewis, MD, Magenta Power.

Magenta Power has been one of the very few firms that have actively started work on setting up charging stations in various cities across India and it was also the first in the country to introduce a solar-powered charging station, along with to set up charging corridors at highways like Mumbai-Pune. Spoke to Lewis about the impact of the announcements made in relations to EVs in Budget 2019, effect of GST reduction on EVs and Magenta Power's plan on expansion.

Q: The announcements for EVs made in Budget 2019 have been hailed as a positive move forward. What impact do you think will reduction in GST on EVs, income tax incentives have on EV popularity in India?

Maxson Lewis: I start with a contrary statement that the Budget 2019 is not a game-changer but certainly a shot in the arm for the EV industry. Let me substantiate my opinion with what the Budget has done positively for the industry and why there is a lot more to be done. Budget 2019 is a positive push for the adoption of Electric Vehicles in India and is in line with the series of steps taken and announcements in that direction. I find 4 points – 3 direct and one indirect point, which is also important from an EV perspective.

1. While the total cost of ownership was always in favour of EV, the announcement in the reduction of GST rate on electric vehicles from 12% to 5% reduces the upfront higher cost as against an ICE engine and improves the buying decision in favour of EVs.

2. The additional income tax deduction of Rs 1.5 lakh on interest on loans taken to purchase electric vehicles is a bonus and the industry had not anticipated that. Credits to the government for this innovative idea to push for EV.

3. A day ahead of the budget, the government lowered customs duty on import of parts and components. This will drive domestic assembling of electric vehicles, which today is plagued by Chinese imports and is actually hurting the EV industry by pushing in low quality assembled vehicles.

4. Last but not least, the EV industry belongs to startups and will not be the domain of large monoliths. The push to simplify investments and support the Start-Up ecosystem will in effect push the EV growth a lot faster.

While credit is due where it is, namely to the government, whose singular focus on EV adoption is more than admirable. But even as an EV enthusiast, EV owner, and an EV ecosystem stakeholder, it is always important to take a contrarian view and look at it from a different perspective and also find ways to do more and better.

Q: Is the government's emphasis on EV charging infrastructure in Budget 2019 substantial for reaping actual results?

Maxson Lewis: The budget gave emphasis for EV charging infrastructure and this has raised the amount of discussion that is happening. This will attract more investors into this space. But operationally, some ground-level alignments are pending and they span across Ministries. For e.g. the standards on AC charging in India are ridiculously favoured to the impractical and to government tenders only. Why would a 3 output socket be mandatory on an AC charger when an EV owner requires a single socket? The standard for AC 001 needs to consider single-socket points as well. We have developed practical EV charging solutions Made in India and Made for India for e.g. the ChargeGrid Pro series, but these hit the bottlenecks of standards which are skewed and create artificial bottlenecks to setting up the infrastructure.

Q: Are there any other policies that Magenta Power as an EV charging infrastructure provider hopes the government to focus on?

Maxson Lewis: There was news that the government intends to mandate 20% of all parking for housing societies to have an EV charging infrastructure. This is one policy which needs to be brought in and enforced. The problem of EV charging infrastructure is not a huge one, a simple solution exists and the policies need to carve out a way to implement those solutions.

Also read: Magenta Power launches ChargeGrid Pro EV charger at Rs 19,750: Easy installation for homes, offices

Q: Niti Aayog's recent proposal on the transition to electric vehicles (EVs) for three-wheelers by 2023 and two-wheelers by 2025 was strongly objected to by two-wheeler manufacturers. How much do you think is the proposal feasible?

Maxson Lewis: The proposal to move all 2 & 3 wheelers to EV is indeed possible. Many start-ups are working towards those. But I also am cognizant that most are taking the easy CKD route from China. While this will start the transition but will create a negative mindset to EVs due to low quality and breakdowns a few months down the line.

We need innovators and visionaries to take an ecosystem route to this transition rather than assemblers of CKDs. We ate Magenta are starting the ‘EVET – Electric Vehicle Enabled Transport’ program to facilitate and support the development of EVs in India. This involves bringing the various stakeholders on a common platform to solve simple but teething issues like standard protocol for fast charging of 2W and 3 W which is not being addressed at all.

Q: Magenta Power has EV corridors between Mumbai – Pune Expressway, Bangalore and Hyderabad. Are there any plans for expansion to other cities?

Maxson Lewis: While EV corridors on highways are part of the plan, we have realized that in-city charging infrastructure will need to take precedence. We are currently present in Mumbai, Pune, Nashik, Hyderabad, Bangalore and now in Chandigarh as well. We will start the EV highway with renewed energy towards the end of this year.

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