India is rapidly moving towards a green and sustainable future, and the electric vehicle (EV) industry plays a significant role in this direction. The Union Budget 2025 has raised substantial hopes and excitement within the EV industry. This budget not only provides an opportunity to address current challenges but can also help propel India towards global leadership in the electric mobility sector.
Expectation of Tax Cuts on EV Batteries
Dr. Yogesh Bhatia, Managing Director and CEO of LML, said, "As India moves towards sustainable mobility, the Union Budget 2025 presents a significant opportunity to advance the electric vehicle (EV) industry. We expect the GST on EV batteries to be reduced from 18% to 5%, charging stations to be granted infrastructure status for easier financing, and performance-based incentives for manufacturers to boost domestic production. These measures will address affordability and infrastructure challenges in EV adoption. At LML, we are committed to providing innovative and environmentally friendly mobility solutions, in line with India's vision of a green future.
Expansion of Charging Infrastructure
There is also a demand to grant infrastructure status to EV charging stations. This would not only make financing for the establishment of these stations easier but also speed up the expansion of the charging network across the country. This move will be crucial for EV adoption in rural and remote areas.
Incentives for E-Trucks and Three-Wheelers
Uday Narang, Founder and Chairman, Omega Seiki Private Limited said, "As the Union Budget 2025 approaches, the EV industry is waiting for announcements that can significantly shape its development. Industry experts expect more incentives and subsidies for the e-truck sector, which is poised to revolutionize logistics and transportation. With the increasing demand for electric three-wheelers, which provide an affordable and eco-friendly transport alternative, the industry hopes that the government will focus on boosting incentives for both manufacturers and consumers. However, the challenge of high-interest rates is weighing heavily on both consumers and businesses, making financing EV purchases and infrastructure development difficult. The government is expected to introduce measures to ease financing terms to promote widespread adoption in all sectors.
"In addition to financial relief, the EV industry is demanding better support for charging infrastructure in rural and remote areas. Expanding the EV charging network is essential for the success of electric vehicles in India, but it requires substantial investment. To achieve this, stakeholders are hoping for tax exemptions, public-private partnerships, and simpler regulations for infrastructure development.
Solving the Financing Problem
Currently, high-interest rates are a significant barrier to purchasing EVs and developing infrastructure. The industry hopes that the government will introduce measures to make financing terms easier, providing relief to both consumers and businesses.Performance-Based Incentives
Suggestions have also been made to introduce performance-based incentive schemes for EV manufacturers. This would promote domestic production and strengthen India’s "Make in India" initiative.
Lohum , Founder & CEO, Rajat Verma said "As we look ahead to the 2025 budget, we are currently awaiting more details on the Critical Minerals Mission, which presents a significant opportunity for growth and market share capture from China as the industry is still in its infancy. We hope that recycling will be granted industry status, enabling the development of a Circular Economy and improving access to services for industry players. Furthermore, we call for more incentives to support midstream players, particularly manufacturers of Cathode Active Materials in the advanced chemistry cell sector, as this support is vital for localization. It is essential to implement protections for domestic manufacturers involved in critical minerals and energy transition to shield them from price volatility, especially in light of Chinese dumping practices. Lastly, formalizing the battery scrap and other critical minerals-bearing scrap industry is crucial, and a reduction in GST could serve as an important incentive in this formalization process."
Charging Networks in Rural Areas
The EV industry is calling for the expansion of charging networks in rural and remote areas. Tax exemptions, public-private partnerships, and simplified rules could help in this direction. This step would not only bring EVs to villages but also take the whole country further along the path of electric mobility.
Samarth Kholkar, CEO and Co-Founder of BLive, said as we head into 2025, the Budget represents a critical opportunity to accelerate India’s transition to electric mobility, especially in the two-wheeler segment, which underpins last-mile delivery and accounts for over 60% of urban transportation needs. Government subsidies and supportive regulations have already driven the adoption of over 1 million electric two-wheelers in the previous year, signalling transformative progress.
To sustain this momentum, investments in charging infrastructure and innovative financing solutions are essential to bridge critical gaps, enabling seamless integration for riders and enterprises. Transitioning to electric two-wheelers could cut urban carbon emissions by up to 40% annually and reduce operational costs by as much as 30% for businesses, presenting a win-win for sustainability and economic growth.
We urge the government to continue prioritising green mobility initiatives, empowering businesses and individuals to embrace sustainability, drive efficiency, and build a resilient, globally competitive future for India.
Expectations from the Government
The EV industry expects the Union Budget 2025 to include:
• Tax cuts on batteries and EVs.
• Increased support for charging infrastructure.
• Special schemes for EV financing.
• Additional incentives for e-trucks and three-wheelers.
• Performance-based incentives to boost domestic production.
Steps Towards a Green Future
Given the growing concerns over climate change and air pollution, this budget could prove to be a crucial turning point for India. The industry hopes that the budget will not only address current issues but also accelerate the shift towards a sustainable and future-ready mobility ecosystem in the country.
Conclusion
The EV industry is optimistic about the Union Budget 2025 and sees it as a significant opportunity. This budget could help India establish a leading position on the global stage in the electric mobility sector. Now, it remains to be seen how much the government can fulfill these expectations.
