Budget 2024 Expectations: The Indian EV sector is eagerly awaiting the upcoming Union Budget 2024, expecting several measures that will accelerate its growth. India has the potential to become a global hub of EV manufacturing. The industry is hoping for tax exemptions, subsidies and other incentives to attract investment in EV manufacturing facilities.
Also read: Budget 2024 expectations: ‘Standard deduction should be one percent of total salary’
The government has been supportive of the EV sector in recent years and it is expected that the upcoming budget will continue to provide a positive impetus to its growth. Here are some key expectations from the industry:
Prateek Kamdar, co-founder and CEO, Neuron Energy, said that as the Union Budget 2024 approaches, significant measures are expected to take the industry forward.
“We strongly support positive changes in the Goods and Services Tax (GST) rules, particularly calling for a lower tax rate for EVs and their parts. This adjustment will not only make EVs more affordable but also encourage more people to adopt electric transportation, in line with our country’s goal of sustainable and eco-friendly travel,” Kamdar urged.
fame
Kamdar is hopeful that the government will increase and strengthen support for the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) scheme. It is important to continue this plan for the continued growth of the EV ecosystem.
“Also, we look forward to insights on the much-awaited FAME III scheme. A well-defined roadmap in this regard will provide clarity to manufacturers, enable strategic planning and boost investor confidence. The seamless transition from FAME II to FAME III is essential for the progressive trajectory of the industry, and we are hopeful that the Budget will provide a comprehensive vision for the future of electric mobility. With rising pollution levels in major cities of India, we need to rapidly adopt and promote EVs as a sustainable option, Kamdar said.
PLI
Hari Kiran, Co-Founder and COO, eBikeGo, felt that as Budget 2024 approaches, the automotive industry is eagerly awaiting insights into the GST scenario, especially for entry-level two-wheelers.
Kiran highlighted that the anticipation is over updates on the potential FAME 3 scheme, PLI concessions and amendments in GST for two-wheelers.
“We hope to continue the emphasis on green mobility based on the government’s understanding of the symbiotic relationship between environmental sustainability and economic growth,” Kiran said.
Customs duty on EV parts
The cut in customs duty on EV parts in the last budget boosted local manufacturing and a similar amendment is expected in the 2024 budget. Kiran said, the demand for a uniform 5% GST on all EV spare parts, in line with the 5% GST on vehicles, resonates within the industry, as we aim for a more equitable tax structure.
Looking beyond the financial allocation, we expect the Budget to unveil a comprehensive policy framework for EVs, addressing licensing, safety standards and insurance norms for electric vehicles. To boost cost reduction, it is important to focus on localized battery manufacturing, with incentives for battery manufacturing units and a strong supply chain for EV components.
EV Infrastructure and Clean Energy
Akshit Bansal, Founder and CEO of Static, an EV charging station network, said the pre-Budget expectations for 2024 are based on the urgent need for transformational reforms in the auto sector, especially geared towards boosting the green and clean energy segment.
“With a firm commitment to tackling pollution and tackling climate change, we expect the government to align its policies with net-zero targets and sustainable development. In particular, the implementation of PLI schemes designed for EV charging companies is of utmost importance,” Bansal highlighted.
The growth of EV infrastructure plays a key role in the widespread adoption of EVs in India, and fiscal incentives will undoubtedly accelerate the expansion of charging networks.
“There is hope for tax reform that not only supports our industry but also encourages consumers to adopt electric vehicles. Circular economy measures should also find prominent place in the budget, promoting recycling, waste reduction and use of eco-friendly materials in manufacturing,” Bansal said.
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