Budget 2024 Expectations: Reduction In Taxes, Extension of FAME, And Focus On Charging Ecosystem

The electric vehicle (EV) sector stands at the crossroads of innovation and sustainability. As we approach the brink of a new fiscal year, all eyes are on the upcoming interim budget, and the electric vehicle industry is abuzz with anticipation and speculations. The imminent budget announcement is poised to shape the policies and initiatives that will define the trajectory of the electric mobility sector in the country.

The electric vehicle industry has witnessed remarkable growth in recent years, driven by a global shift towards cleaner and more sustainable transportation alternatives. As countries worldwide commit to reducing carbon emissions and combating climate change, the electric vehicle market has emerged as a key player in this transformative journey. In India, too, the government has expressed its commitment to promoting green mobility and has set ambitious targets for the adoption of electric vehicles in the coming years.

In the lead-up to the budget, stakeholders within the electric vehicle ecosystem, including manufacturers, innovators, and industry advocates, have been vocal about their expectations. One of the primary expectations revolves around fiscal incentives and policy support to boost the production and adoption of electric vehicles. Industry leaders are hopeful that the budget will introduce financial incentives to make electric vehicles more affordable and attractive to consumers.

As we navigate the intricate web of expectations and aspirations within the electric vehicle industry, this pre-budget story aims to capture the diverse perspectives that shape the narrative of an industry poised for transformation. From the manufacturing hubs to research and development centers, the electric vehicle ecosystem is eagerly awaiting the unveiling of the budgetary measures that will play a pivotal role in steering the industry towards a greener and more sustainable future.

Omega Seiki

Uday Narang, Chairman, Omega Seiki, said that affordability, accessibility, and sustainability must align for country’s electric vehicle revolution.

“For India's electric vehicle revolution to truly shift gears, three factors must align including affordability, accessibility, and sustainability. Affordability hinges on continued government support: Reduced GST on lithium-ion batteries and the introduction of FAME 3 with clarity on subsidy of electric trucks, alongside domestic battery manufacturing and skilling initiatives. Accessibility demands a robust charging infrastructure that reaches beyond metros, powered by clean energy sources and bolstered by open data standards for seamless charging. Sustainability, a focus on responsible end-of-life battery management, with R&D in recycling and circular economy measures leading the way. Prioritizing these pillars is the only way India can unlock the true potential and adoption of electric vehicles,” Narang told Opportunity India.

Moreover, there is a growing demand for increased investment in charging infrastructure, which is pivotal for the widespread acceptance of electric vehicles. Stakeholders are looking to the government to allocate funds and formulate policies that will expedite the development of a robust charging network across the country, addressing a critical barrier to EV adoption.

The interim budget is also anticipated to address regulatory challenges and provide clarity on standards and certifications for electric vehicles. A streamlined regulatory framework is expected to create a conducive environment for manufacturers and investors, fostering innovation and competitiveness within the sector.

TelioEV

Dr Lalit Singh- CEO of TelioEV said that as the Union Budget 2024-25 approaches, the electric vehicle (EV) industry in India anxiously awaits the implementation of policies that will spur its expansion and advance the country's e-mobility goals.

“We anticipate continued support in the form of demand-side incentives, such as tax deductions for purchasers of electric vehicles and an extension of FAME-II subsidies. The development of a resilient EV charging ecosystem is of equal importance, especially in Tier II and Tier III cities, we urge the government to allocate substantial funds for the development of charging infrastructure,” Singh said.

He said that the open data standards and APIs for charging networks should be prioritized in the budget as this will encourage interoperability and nurture a thriving software ecosystem by providing EV drivers with seamless access to any station, irrespective of the provider.

“Additionally, we seek fiscal incentives such as tax rebates to support investments in R&D for software solutions that enable advanced charging. This will encourage innovation in areas like smart grid integration, dynamic pricing, and demand forecasting will optimize energy use and enhance charging efficiency.  By placing these measures as a priority, the budget has the potential to significantly impact India's EV revolution, thereby facilitating the transition to a more environmentally sustainable future,” he added.

Metastable Materials

Metastable Materials co-founder Shubham Vishwakarma said that 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.

“As we anticipate the 2024 budget announcement, we hope for a forward-looking budget that reflects India’s commitment to sustainability and technology advancement. 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,” Vishwakarma said.

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,” he said.

Vegh Automobiles

Meanwhile, Pragya Goyal, CEO & Co-Founder, Vegh Automobiles said that India’s electric vehicle sector is on the cusp of unprecedented growth, particularly in the realm of electric two-wheelers, with projections hinting at surpassing the one million mark in 2024. As we eagerly await Budget 2024, the industry anticipates transformative changes.

“We welcome the government's decision to introduce FAME 3 scheme into the next financial year. The proposed adoption of the FAME 3 incentive scheme for manufacturing electric vehicles (EVs) will drive the expansion of EV charging stations, address range anxiety and encourage even wider adoption of EVs,” she said.

Despite India’s potential to establish manufacturing prowess in burgeoning sectors, India needs to make significant strides for it to substantially increase its global manufacturing share and Budget 2024 will need to take care of that as well. To capitalise on the momentum set out by the current government, the interim budget will need to take into account forging trade agreements that make exports more lucrative for companies seeking to diversify their production and emphasise bolstering the logistics sector. In light of the existing global constraints and monopolization in the lithium supply chain, there is a pressing need for India to engage in research aimed at creating indigenous and cost-effective machinery and technology,” Pragya Goyal said.

eBikeGo

Hari Kiran, Co-Founder and COO, eBikeGo said that Anticipation surrounds updatеs on thе potеntial FAME 3 schеmе, PLI SOPs, and revisions to GST for two-whееlеrs.

“As thе 2024 Budgеt approachеs, thе automotivе industry еagеrly awaits insights into thе GST landscapе, particularly for еntry-lеvеl two-whееlеrs. Anticipation surrounds updatеs on thе potеntial FAME 3 schеmе, PLI SOPs, and rеvisions to GST for two-whееlеrs. Wе hopе for a continuation of grееn mobility еmphasis, building on thе govеrnmеnt's undеrstanding of thе symbiotic rеlationship bеtwееn еnvironmеntal sustainability and еconomic growth,” Hari said.  

He said that thе rеduction in customs duty on EV parts in thе prеvious budgеt spurrеd local manufacturing, and similar amеndmеnts arе еxpеctеd in thе 2024 budgеt. Calls for a uniform 5 per cent GST on all EV sparе parts, alignеd with thе 5 per cent GST on vеhiclеs, rеsonatе within thе industry, as we aim for a morе еquitablе tax structurе.

“Looking bеyond financial allocations, we hope thе budgеt unveils a comprеhеnsivе policy framеwork for EVs, addrеssing licеnsing, safеty standards, and insurancе norms tailorеd for еlеctric vеhiclеs. To fostеr cost rеduction, a focus on localizing battеry manufacturing is crucial, with incеntivеs for battеry manufacturing units and a robust supply chain for EV componеnts,” he added.

BLive 

Samarth Kholkar, CEO and Co-Founder, BLive said, “The anticipation is that the government will incorporate the Electric Vehicle (EV) sector into Priority Sector Lending (PSL), facilitating more accessible financing options for both personal and commercial electric vehicles. Additionally, there is a hopeful outlook for policy initiatives aimed at advancing EV adoption. This includes the extension of subsidies to enhance the affordability of electric vehicles and the implementation of incentives for conversion kits, encouraging the transformation of Internal Combustion Engine (ICE) vehicles into Electric Vehicles (EVs).”

DriveX

Narayan Karthikeyan, Founder & Managing Director, DriveX said, “As we anticipate the Interim Budget 2024-25, we recognize the pivotal role it plays in shaping the economic landscape, particularly for the two-wheeler auto industry. The potential benefits that could arise from individual taxation reforms hold promise for our industry. With the government's focus on stimulating consumer spending, the possibility of tax incentives or reductions could significantly boost the demand for pre-owned two-wheelers.”

Furthermore, we look forward to potential initiatives in the budget that encourage sustainable practices within the automotive industry. Our commitment to quality refurbished vehicles aligns seamlessly with the vision of a resilient and progressive two-wheeler auto industry. With an eye on the budget, we remain optimistic about collaborative measures that will propel our industry forward. Together with our dedicated team, strategic partners, and a customer-centric approach, we stand ready to embrace the evolving landscape and capitalize on the opportunities that the upcoming budget may unfold, he said.

Snap ECabs

Mayank Bindal, Founder & CEO, Snap E Cabs said that FAME II subsidy is one of the most anticipated schemes to be continued. “Along with this, there is a proposal to reduce the GST on the Li-ion batteries from 18 per cent to 5 per cent overall, reducing the cost of acquiring EV's. Since batteries are a major cost component in EV's, the move to reduce the cost of batteries will make the product more lucrative for buyers,” Mayank said.

He also said that over the past five years the government has focused a lot on building strong infrastructure. It is expected to continue improving and make efficient investments in energy, especially green energy and sustainable energy. The focus is on transitioning from carbon dependent to energy efficient policies. The new transport policies being adopted by the state govt is a testament to this shift. Many state transport authorities have announced the conversion of Petrol/Diesel cabs be converted into EV's by the end of this decade.

“We look forward to EV financing getting priority sector lending status as the government's ambitious target of 30 per cent penetration to be achieved by 2023,” he added.

ARENQ

VG Anil, CEO, ARENQ said, “We are a major manufacturer that focuses on making UPS, Solar, and EV batteries. We are excited about the upcoming budget and hope it includes policies that support green initiatives and renewable energy. A budget that looks forward to the future could encourage research and development, improve electric mobility infrastructure, and make it easier for people to use sustainable power solutions. We want the budget to promote innovation, reduce our reliance on traditional energy sources, and help the country become more environmentally friendly and resilient. We are committed to making high-quality batteries that are good for the environment, and we hope the budget supports our goal of creating a sustainable and energy-efficient world.”

ARC Electric

"As we step into 2024, witnessing the advancements in the EV and Auto industry, our optimism is accentuated by the anticipation surrounding Budget 2024. The government's ongoing initiatives, such as subsidies, tax cuts, and collaborations, have been instrumental in driving development. With the expectation that the EV market will grow by over 100% in 2024, we look forward to continued support in the upcoming budget. This support is crucial, not only for small businesses to thrive in the market but also for industry leaders to foster technological advancements and embrace sustainable practices. May this year signify a period of substantial growth, with the budget playing a pivotal role in shaping a resilient and forward-looking business landscape," Abhinav Kalia, CEO and CO-Founder, ARC Electric said.