EV industry players demand more subsidies and less GST in Budget 2024

Industry participants on Tuesday urged the government that the Union Budget FY25 should include incentives like FAME 3.0 together with GST reductions for electric vehicles. Some others stated that the EV industry's resale sector needs to be supported. On July 23, Finance Minister Nirmala Sitharaman is scheduled to deliver the first annual budget under Modi 3.0.

“The interim budget, which notably stressed the need for greater charging station construction, demonstrated the government's commitment to expanding the electric vehicle (EV) ecosystem in India. While EMPS and FAME II are commended, expectations are high for a new subsidy scheme that is akin to FAME II, with stricter eligibility conditions for vehicle types and localization requirements. Larger vehicle categories including trucks are anticipated to be included in the subsidy scope, in addition to passenger cars, two-wheelers, and three-wheelers,” citing Maxson Lewis, Founder & CEO of Magenta Mobility Economic Times reported.

He further said, “It is anticipated that there would be a strong focus on indigenous battery and electric vehicle (EV) manufacturing capabilities as well as research and development (R&D), with additional funding for the Production-Linked Incentive (PLI) programme. It is also planned to review EV's priority financing sector status and further up efforts.”

On the other hand, Akihiro Ueda, CEO of Terra Charge stated “As an electric two-wheeler manufacturer, I am looking forward to the upcoming Budget 2024 and am hoping for positive announcements as well as clarity in the implementation of policies."

He further said, “First and foremost, I'm excited about targeted incentives like FAME 3.0 that may lower the cost of electric two-wheelers for regular commuters, allowing us to expand our market share. Lowering the GST on electric vehicles and providing larger purchase incentives may also have a substantial impact on how quickly consumers embrace EVs. As a participant in the market, we expect more backing for regional battery innovation and manufacturing. Similar to this, increased backing for the "Made in India" campaign and locally sourced production of our electric two-wheelers could assist Indian EV producers such as ourselves in creating more effective and environmentally friendly mobility solutions that can rival global brands and be available to a wider consumer base. These steps, in my opinion, could help us improve the entire ecosystem.”