Interim budget 2024: Driving mobility on green path

  • Industry News
  • Feb 01,24
With a goal to achieve India’s net zero emission target by 2070, the interim budget 2024-25 announces some measures to strengthen the electric vehicle (EV) ecosystem and charging infrastructure. Here is what the EV industry leaders have to say about the budget.
Interim budget 2024: Driving mobility on green path

Interim budget 2024-25 brings about a wave of positivity for the electric vehicle (EV) industry with proposals to improve charging network and other sustainability initiatives. The allocation of Rs 2,671 crore is expected to significantly boost electric vehicle makers encouraging growth and innovation. The budget's commitment to achieving net zero by 2070 and a renewed focus on sustainability will further propel the green mobility market. Vinod Aggarwal, President, Society of Indian Automobile Manufacturers (SIAM), said, “The announcement on strengthening the electric vehicle ecosystem by supporting manufacturing and charging infrastructure, will boost the development and adoption of EVs in the country. The encouragement of Payment Security Mechanism for adoption of e-buses for public transport networks is also a welcome step.”

The government's steadfast commitment to supporting EV manufacturing and charging infrastructure is a proof to its dedication to fostering green growth and environmental sustainability. "The expansion and strengthening of the EV ecosystem, as outlined in the budget, is in line with our company's mission to provide reliable and accessible charging solutions for EV users across the nation. With the government's backing, we are poised to witness a significant acceleration in the adoption of electric vehicles, further reducing carbon emissions and mitigating the environmental impact of traditional transportation methods. As India progresses towards its net zero emission target by 2070, the government's commitment to expanding and strengthening the EV ecosystem, along with developing charging infrastructure, is commendable. The transition of public transport, particularly buses, to electric vehicles highlights a proactive stance in the pursuit of environmental sustainability and the curtailment of reliance on fossil fuels. Of notable mention is the emphasis on incentivising the wider adoption of e-buses for public transit networks through payment security mechanisms. This initiative not only facilitates the shift towards cleaner transportation modes but also ensures the dependability and accessibility of EV charging infrastructure for public usage. As a leading player in the EV charging network industry, we are excited to collaborate with the government and other stakeholders to realise this vision and create a cleaner, healthier environment for future generations," said Akshit Bansal, CEO & Founder, Statiq.

The significant progress gained in all aspects of infrastructure physical, digital, and social over the last decade demonstrates India's multifaceted economic management, which effortlessly aligns focus on infrastructure building with aggressive capital expenditure; with inclusive and people-centric development. Interim budget's announcements for Viksit Bharat illustrate the government's steadfast commitment to creating a developed India by 2047. 
Sulajja Firodia Motwani, Founder and CEO of Kinetic Green, commented, "The allocation of 2.78 lakh crores to the Ministry of Road Transport and Highways is a clear indication of strides toward progress, particularly in fortifying the electric vehicle (EV) ecosystem. The government's commitment to the expansion and fortification of the e-vehicle ecosystem, promote deployment of EVs for the masses, coupled with support for manufacturing and charging infrastructure, marks a pivotal moment. The government remains resolute in its commitment to expanding and sustaining this ecosystem, fostering entrepreneurial opportunities for vendors engaged in the supply and installation of charging infrastructure. Simultaneously, it aims to create employment opportunities for the youth equipped with technical skills in the manufacturing, installation, and maintenance of these vehicles. The EV sector was expecting an announcement in the interim budget regarding the continuation of the Fame scheme for demand generation. We are hopeful to have this coming in the weeks ahead. We receive this budget with great enthusiasm, confidence and hope for the coming Amrit Kaal.”

Welcoming the decision to not extend subsidies for EVs, Anirudh Ravi Narayanan, CEO of BNC Motors Pvt Ltd, said, "The Indian EV 2W market has achieved a certain level of adoption now where we don’t require demand-side subsidies, and just the GST difference between ICE (at 28%) and EV (at 5%) 2Ws serves as a sufficient incentive. It’s time now for the Indian EV industry to wean off from subsidies and start to work on cost reductions and operational improvements. Being cost-competitive will be very important if we hope to beat Chinese companies in international markets."

Arun Sreyas, Co-Founder, RACE Energy, appreciated the interim budget's focus on supporting manufacturing and charging infrastructure and emphasising the importance of enhancing e-bus adoption by incorporating robust payment security options. He said, "However, as a battery swapping company heavily reliant on Li-ion batteries, we were hopeful for GST parity on swappable batteries. A notable disparity exists in the rates between EVs sold with fixed batteries (taxed at 5%) and the Li-ion batteries utilised for swapping purposes (taxed at 18% when sold separately). It is crucial to consider this need for the widespread adoption of EVs, and we are hopeful this will be addressed in the Union Budget presented later this year.”

According to Niraj Rajmohan, Founder and CTO, Ultraviolette Automotive, there is a compelling need and opportunity to accelerate adoption by establishing reliable ecosystems around EVs. "We are happy to see the Government of India's renewed commitment to EV manufacturing. The expansion of the charging infrastructure will make charging more accessible and boost the convenience for EV owners. While we appreciate the lower GST rates on EVs and chargers which have made EVs more affordable, we believe that the reintroduction of tax benefits for EV financing will greatly incentivize adoption. With respect to the larger policy framework, we continue to advocate that subsidies and benefits should spur cutting-edge technology development and not be capped by product cost," he said.

Industry experts believe that there is a pressing need for governments to champion a sustainable future by extending vital support to the electric vehicle (EV) industry. "Providing subsidies and monetary support to OEMs is paramount, fostering an environment that propels EV sales and facilitates seamless adoption in the mass market. At Zen Mobility, we applaud government initiatives to expand and fortify the e-vehicle ecosystem, including support for manufacturing and charging infrastructure. This signifies a collective stride toward a cleaner, greener transportation landscape," observed Namit Jain, Founder & CEO, Zen Mobility.

Avinash Sharma, Co-Founder & CEO, ElectricPe, added, "This year, we expected the strong growth of the EV sector to continue, with additional support from the government in terms of subsidies, incentives and policy across state and central. In her speech, Honorable FM Nirmala Sitharaman went over increases in support for EV infrastructure and manufacturing, which is positive for the industry. However, the changes to EV Charging GST, is still needed for the industry to experience unhampered growth. We are hopeful that further discussions will be had with regards to lowering GST for charging rates and standalone batteries, therefore growing EV affordability and adoption."

According to Kartikey Hariyani, Founder and CEO, ChargeZone, the Interim Budget 2024 reflects a strong commitment of the government to the electric vehicle (EV) ecosystem. He said, "ChargeZone is perfectly aligned with this vision, emphasizing the need to fortify both EV manufacturing and charging infrastructure. The encouragement of e-buses in public transport networks, along with the implementation of a robust payment security mechanism not only accelerates the adoption of sustainable transportation, but also propels the growth of the EV charging sector. We are glad to be able to play a key role in steering this positive transformation by actively contributing to the manufacturing, installation, and maintenance of EV charging stations across the country. As part of the National Highway Electrification Scheme, we've also been electrifying state and national highways by installing fast chargers for seamless and accessible charging for EV owners, demonstrating our vision of accelerating India’s transition to green mobility."

Neel Chheda, Senior Executive Vice President & Head – Auto & Actuarial Analytics, Tata AIG General Insurance Company Ltd, believes that the interim budget of 2024-25 unveils a visionary initiative to enhance EV ecosystem. "By bolstering manufacturing capabilities and charging infrastructure, it aims to drive the adoption of clean and efficient transportation. We can aspire to create an ecosystem that not only benefits the environment but also propels our nation to the forefront of global leadership in sustainable energy. We expect more collaborations with the EV industry enabling solutions that cater to the evolving needs of the e-mobility landscape. We look forward to remaining committed to support and contribute to the growth and success of government’s vision for a greener future," he said.

The government's dedicated focus on prioritising policies to enhance the affordability, accessibility, and availability of clean energy perfectly aligns with India's strategic goal to establish energy efficiency as a cornerstone for the nation's future. Dr Satish Kumar, President & Executive Director, Alliance for an Energy Efficient Economy, said, "Optimism abounds as forthcoming reforms centre on sustainable and resilient growth, particularly in the development of the electric vehicle ecosystem. The allocated funds for charging infrastructure and the introduction of new EV buses are positioned to play a pivotal role in realising India's ambitious net-zero goals and effectively combating climate change. It is imperative that new construction seamlessly integrates low-carbon and energy-efficient building practices to pave the way for a decarbonised built environment. AEEE stands prepared to collaborate with the government and other stakeholders, ensuring the successful implementation of these visionary initiatives."

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