As India prepares for the Union Budget 2024, the electric vehicle (EV) sector is at a critical juncture, anticipating policy moves that could shape its future trajectory. The recent conclusion of the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME) India scheme on March 31, 2024, has left the industry on edge, underscoring the urgent need for continued government support to sustain the sector’s momentum.
The FAME India scheme, instrumental in catalysing the initial wave of EV adoption, provided essential subsidies and support. However, with the scheme’s end, the sector faces enduring challenges such as inadequate charging infrastructure and prohibitive battery costs. In response, the Ministry of Heavy Industries (MHI) has introduced the Electric Mobility Promotion Scheme (EMPS) aimed at boosting the adoption of two-wheeler and three-wheeler EVs and advancing EV technology and manufacturing. Industry leaders are now calling for a comprehensive set of measures in the upcoming Budget to ensure the sector’s sustained growth. The officials of SUN Mobility emphasised the need for a strategic overhaul, stating, “India stands at the forefront of the EV revolution, with the government’s efforts towards clean mobility being commendable. The upcoming Budget should aim to level the playing field across all EV technologies, focusing on issues such as GST disparities and subsidies for swappable batteries.” Anticipated demands include the establishment of a robust Battery Swapping Policy, the introduction of FAME III with enhanced funding for electric buses, and incentives for local production of EV components. These measures are seen as pivotal in fortifying India’s EV ecosystem and maintaining the sector’s upward trajectory.
Similarly, officials highlighted the urgent need for fiscal reforms to alleviate the financial pressures on manufacturers. “Current GST rates on raw materials significantly exceed those on finished vehicles, creating a cash flow squeeze for manufacturers. We hope the Budget addresses these discrepancies to ease the financial burden and ultimately benefit the consumer.” The Co-founder and CEO of Zypp Electric stressed the importance of policy continuity for achieving the country’s net-zero carbon emissions target. “Inclusion in the priority lending scheme and a reduction in GST for EV services are essential for accelerating EV adoption in the delivery sector. We also call for the recognition of last-mile delivery as a distinct sector under logistics policies.”
The CTO and Co-founder of Ultraviolette emphasised the need for robust support in deep tech research and development. “The next phase of EV sector growth will depend on our ability to become a leading technology creator. Initiatives that support innovation without segment-specific caps will be crucial for the sector’s advancement.” As the Budget announcement approaches, the sector’s key players are united in their call for measures that will not only address existing challenges but also foster a more dynamic and innovative EV ecosystem in India.
