Budget 2024: EV manufacturing companies expect subsidies to promote EV adoption
Automotive manufacturers and
EV
followers in India are anticipating big changes from the government to encourage the uptake of electric vehicles in India as the entire nation waits for the Budget 2024.Lately, the government has been able to significantly increase the adoption of electric vehicles in India because of the FAME incentives.
Last month, several initiatives to promote the nation's adoption of EVs have been endorsed by the Parliamentary Standing Committee on Industry. One such initiative was the three-year extension of the FAME-2 (Faster Adoption and Manufacturing of Electric Vehicles) (FAME-II) programme.
The committee stressed in its report on the promotion of electric vehicles that private four-wheelers and quadricycles should be included in the programme in addition to EV mandates for the public transportation, distribution, and logistics sectors.
To encourage electric transportation, the Ministry of Heavy Industries (MHI) has also suggested extending the duration of FAME-II and broadening its purview. The committee recommends setting a timeline for requiring all vehicles in the nation to be electric to transition to a carbon-neutral transportation sector.
These reports alongside different ease-of-doing-business initiatives like the Jan Vishwash Act are likely to promote EV manufacturing and adoption rate in India. However, the extension of the FAME-2 policy while increasing its range of vehicles will require a significant monetary upliftment that is expected to be seen in the upcoming budget.
Meanwhile, standing on the idea of “minimum government, maximum governance” the government may continue the existing structure by creating more prospects for private investment in the EV industry.
In the third case scenario, If the incentives are lowered, the significant increase in EV prices may discourage any buyer hoping to purchase a new electric vehicle. Additionally, there has been a steady improvement in the uptake of electric automobiles, particularly in Tier 1 cities like Delhi, Bangalore, and Mumbai.
In light of this, a lot of manufacturers think the government in India won't cut back on or eliminate FAME incentives for electric vehicles. Furthermore, a lot of people anticipate that the government will keep running its present subsidy programmes, although with a few little adjustments.
Additionally, it is anticipated that the government will launch several programmes that will assist EV manufacturers that strive to use a greater number of made-in-India components in an effort to encourage the production of the vehicle’s batteries and componentry in India. By implementing such programmes, the government hopes to encourage more electric vehicle manufacturers to invest in India, create jobs, and lower the total cost of producing EVs in the nation.
Nevertheless, it is not expected that luxury electric vehicles will get any subsidies as this will increase the government's workload and have little influence on the vehicles' overall efficacy.
Government subsidies are a major factor that many manufacturers are counting on to draw in new electric vehicle customers. Therefore, lowering taxes on EV parts can assist EV manufacturers in cutting manufacturing costs overall and offering more appealing pricing for the finished product.
Additionally, rewarding EV manufacturers who employ components manufactured in India would encourage additional EV manufacturers to do the same. Additionally advantageous to the consumer will be the possibility of cheaper EV parts.