Budget 2023: Enhancing economies of scale a key requirement for EV sector | The Financial Express

Budget 2023: Enhancing economies of scale a key requirement for EV sector

Most EV players are hoping for GST rationalisation and continuation of subsidies in the Budget. But, most importantly, they are looking at ways to encourage scaling up of the EV ecosystem for faster adoption of electric vehicles across segments.

Budget 2023: Enhancing economies of scale a key requirement for EV sector

Sulajja Firodia Motwani, Founder and CEO, Kinetic Green believes that 2022 was a significant year for the EV sector in India. She expects that, “The support for E-mobility should continue with extension of FAME-II by another 3 to 5 years. This will help in building a long-term foundation for the EV segment in India by making EV mainstream with a 20-25 percent penetration.  If subsidy is not extended, the cost of EVs would increase substantially and it would delay and derail e- Mobility movement.”

Sumedh Battewar, co-founder and CBO EMotorad, The policy change that we are expecting this year is that the government may announce incentives on batteries, rather than on vehicles. I also expect the government to benefit from a battery-swapping network in some capacity. Apart from this FDI norms need to be revisited so that capital from the western and middle east world can be mobilized in the country easily under climate tech space.”

Santosh Iyer, Managing Director & CEO, Mercedes-Benz India: “We are optimistic about the upcoming Union budget and expect it to be progressive and forward-looking, acting as a catalyst for India’s long-term growth trajectory. We hope for continued capital outlay for development of roadways and infrastructure, with a timely implementation of the ongoing projects.

In the recent years, we have witnessed the direct impact of better roadways and inter-state connectivity in propelling demand for automobiles, and boosting the industry and economy. We welcome the policy makers’ continued strategic focus on electrification and request for a long-term outlook and continuation of these stable policies, encouraging e-mobility adoption in India.

The current tax incentives and other benefits should continue for a period of 8-10 years in order to boost growth in the EV segment, advancing the inflection point for EVs and making the auto industry gain the critical mass for these vehicles. Incentivizing the creation of charging infrastructure will play an important role in expediting EV adoption in the country and boosting customer confidence.

Finally, we wish for reconsideration of the current import duties for EV’s to boost their demand, resulting in a faster acceleration for achieving the Government’s vision of a sustainable green mobility ecosystem in the country.”

The electric vehicle segment in increasingly gaining traction. Needless to mention that the FAME Subsidy and the PLI schemes sure added the much needed boost. Going forward what’s the industry’s expectation fro the Budget? Let’s hear in-

Uday Narang, Founder and Chairman, Omega Seiki Mobility, “In order to further enhance EV adoption in India, EV-financing will become the biggest enabler. Attractive economics and push by governments has already increased the demand for EVs substantially. We have the following expectation –

  1. The first and foremost is the standardization of battery voltages and form factors
  2. Extension of FAME II subsidy to promote conversion of ICE vehicles to electric.
  3. Expect Govt. to ensure availability of financing at equivalent rate of ICE vehicles.
  4. As EV manufacturers, we expect the government to correct the inverted duty structure.
  5. Incentivising setting up EV charging stations in existing residential areas, housing complexes and commercial establishments.
  6. Testing equipment’s standardization in the Battery packing norms to ensure safety and quality.”

She is also urging the Government to “lower the import duty on battery cells for 3-4 years to support EV movement until localized production starts. India has started adopting EVs as a mobility solution, and with continuous support from the Government, we will make great progress in the coming decade.”

Samarth Kholkar, CEO & Co-Founder, Blive pointed out that the Budget comes at a time when India has surpassed Japan to become the 3rd largest auto market. He expects that the government will take steps to boost consumer confidence and encourage them for higher EV adoption through incentives and benefits, “EV financing has a key role to play in this and we are hopeful that the Budget will carry announcements that will make financing accessible and affordable for all.

We hope that the government will take steps to build a robust charging infrastructure, announce subsidies for battery manufacturers to  enable fast-charging infrastructure across India and benefit EV owners.  We also expect rationalisation in GST rates to bring down costs of EVs. We want all EV parts to be included in the 5 percent bracket to support the EV manufacturers.”

Rajeev Sharma, Chief Strategy Officer, Mitsubishi Electric India is looking at the Budget for steps to encourage infrastructural development and bring technological innovation, “I hope that Budget 2023 scales a path towards India’s growth story, especially in the infrastructure and technology sectors. The expectation for the upcoming union budget is to continue and provide the right policy and budgetary framework to ensure economic growth of the country and a budget design that can stand as per the GDP growth rate expectations.”

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Rajat Verma, CEO & Founder, Lohum added that the “A circular economy of battery raw materials will boost India’s energy security and uplift domestic manufacturing. Government support can greatly accelerate this shift and magnify its rewards, which we hope to see in the budget this year.”

Arjun Sinha Roy, Co-Founder, iRasus Technologies further said that, “The urgent need of the hour is to drive Reliability, Interoperability, and Economies of Scale across all parts of the EV ecosystem. Some sectors that need support and push from the Government are the Batteries (both hardware and software), OEM, and Charging Infrastructure. The Budget should focus on ease of business and encourage more local players to enter the market. Areas like component Localization, access to components, etc, if addressed, then the Indian companies, big or small, can build competitive products at competitive prices. In 2000 India became a software hub. Maybe in the 2020s, India can become the EV hub of the world.”

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First published on: 25-01-2023 at 14:27 IST