The electric vehicle segment in India is amongst the fastest-growing globally and aspires to be a leader in the nascent technology by fostering indigenous solutions. But the ecosystem cannot flourish by itself at least in the initial stage and pins its hopes on the government to support its ambition of making India an EV powerhouse.
Akshit Bansal, CEO & Founder, Statiq: “The pre-budget expectations for 2024 are grounded in the urgent need for transformative reforms in the auto sector, specifically geared towards nurturing a green and clean energy segment. With a staunch commitment to combat pollution and address climate change, we anticipate the government to align its policies with the net-zero goal and sustainable development. In particular, the implementation of Production-Linked Incentive (PLI) schemes tailored for EV charging companies is of utmost importance. The growth of EV infrastructure plays a pivotal role in driving widespread EV adoption in India, and financial incentives will undoubtedly accelerate the expansion of our charging network. Moreover, looking forward to tax reformation that not only supports our industry but also encourages consumers to embrace electric vehicles. Circular economy measures should also find a prominent place in the budget, promoting recycling, waste reduction, and the use of eco-friendly materials in manufacturing. Additionally, the continuation of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme for the next 5 years, extending beyond its current schedule till March, is essential. This extension is vital for maintaining upfront price parity for EVs compared to Internal Combustion Engine vehicles, ensuring sustained EV adoption momentum and protecting investments in the sector. FAME III will be crucial to bridge the price gap, sustaining interest in EVs, and contributing to pollution reduction and fuel security. These concerted efforts will not only advance the EV industry but also make substantial contributions to creating a cleaner and more sustainable automotive future in India.”
Arun Sreyas, Co-Founder, RACE Energy: “The infusion of funds within the FAME scheme highlights the government’s dedication to promoting the widespread adoption of EVs. However, it’s crucial to acknowledge battery swapping’s pivotal role in this growth. Presently, a notable disparity exists in the GST rates between EVs sold with fixed batteries (taxed at 5%) and the lithium-ion batteries utilised for swapping purposes (taxed at 18% when sold separately). With the Interim Budget announcement in February, we’re also expecting GST parity for EV batteries used in swapping—crucial for competitive pricing—and they should hopefully align with the 5% bracket to fortify the EV landscape. We also hope that the registration process and subsidy mechanism for battery swapping vehicles will be defined under the guidelines of the FAME scheme.”
Avinash Sharma, Co-Founder & CEO, ElectricPe: “In the past year, favourable government policies and confidence in the sector has led to a surge in EV sales and production, exiting the nascent stage. With the upcoming budget we’re hoping for an equitable landscape with subsidies and incentives, across state and centre. This will not only increase production, but also sales, usability and support. The extension of FAME 2 to FY2025 is in itself a great sign for the continued development of the industry. Additionally, the GST rate on batteries needs to be lowered from 18% down to 5%, in line with battery EVs, which will bring battery swapping and battery subscription in line with traditional EVs, a much-needed step. With regards to GST, there is also a need for parity of 5% GST rate across states for charging, to enable faster adoption of EVs and infrastructure development, which we hope we will see in this budget.”
Dinesh Arjun, Co-Founder & CEO, Raptee Energy: “As the electric vehicle (EV) industry gears up for substantial growth in the coming years, it is imperative for the government to foster a supportive ecosystem. To stimulate investment opportunities, there should be encouragement for potential investors, coupled with essential reductions in GST rates for electric vehicles and charging stations. Additionally, easing the burden on the industry can be achieved through 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% specifically for lithium-ion battery packs and cells, given their pivotal role in the EV sector. A concerted effort in the budget towards enhancing the ease of doing business and facilitating the entry of local players into the market is crucial. Addressing aspects like component localization and ensuring easy access to necessary components will empower Indian companies, both large and small, to develop competitive products at competitive prices, further solidifying the sector’s growth potential.”
Shubham Vishvakarma, Co-Founder, Chief of Process Engineering, Metastable Materials: “A large volume of India’s end-of-life lithium-ion batteries is exported globally for recycling or just processed as an intermediate black mass and then exported. Hence, massive R&D investments are required, particularly to create strong competencies and lab testing facilities for the proper end-of-life lithium-ion battery recycling. This not only contributes to responsible environmentalism but also nurtures a talented pool of individuals. Another area, where we are hopeful for is the Production-Linked Incentive (PLI) and it’s extension to battery recycling. This would also be a strategic approach as by expanding the range of the scheme beyond just the Advanced Chemistry Cell manufacturing, we open up the opportunity to capture the entire value chain. This extension will incentivize the setting up of homegrown recycling firms instead of shipping away the dead batteries. We also recommend that the recycling of lithium-ion batteries be incorporated into the Carbon Credit Trading Scheme. This inclusion, in particular for negative-value battery chemistries feasibility will provide substantial support to India’s position in the carbon credit markets and also demonstrates our continued dedication to sustainable solutions.”
Varun Goenka, CEO & Co- Founder, Chargeup: “The government of India’s proposed FAME-III plan has indicated that there is continued focus on the development and faster adoption of EVs in India, and that’s encouraging for all ecosystem stakeholders. However, this is also a time when we need to look beyond subsidies for the purchase of electric two- and three-wheelers and address other financial concerns that could make a bigger and more positive impact on the market compared to the subsidies. FAME-I and FAME-II did a lot of good to these segments, as the demand was catalysed and several new EV OEMs came into the market. However, today, there is not much of a difference between the cost of electric and conventional two- and three-wheelers. With greater demand, the gap will further close in 2024 and beyond. However, issues like high GST rates, and lack of affordable financing for building EV infrastructure such as Battery-as-a-Service facilities, charging stations, and undertaking R&D is a bigger concern. We expect the government to reduce GST applicability on EV products and services, and to include the EV as well as battery development, charging networks, and allied services in the priority sector lending list. This would open the doors for investments in the ecosystem, and accelerate India’s EV adoption. Further, the impact of FAME-III subsidies can be enhanced if EV buyers who choose to buy a vehicle without a battery are also covered under it. If the allocation for electric two- and three-wheeler subsidies is reduced, and funds are deployed towards other areas of ecosystem building, that would also make a positive impact. We are hopeful that through the upcoming Interim Budget, and the full Union Budget later in the year, the government of India will address these needs.”