Reduced import duties, infra support: EV sector expectation from Budget 2022

With India being a booming ground for EV proliferation, all eyes are on the Union Budget 2022. There are several expectations from the industry regarding the EV sector. The stakeholders are pinning their hopes on more R&D incentives, financing options, infrastructure support and building a conducive, supportive EV ecosystem in the country.

Dr. Akshay Singhal, Founder, Log9 materials, working in the advanced EV battery-technology domain states, “In the upcoming Union Budget, from the EV ecosystem perspective, we hope to see that the  FAME Subsidy corpus should be extended to EV retro fitment kits. Additionally, more R&D incentives should be given for energy storage and EV technology-related developments in India, as well as R&D investments made into local technology developments, which should be made 100% adjustable against corporate taxes.”

Deepak MV, CEO & Co-Founder, Etrio believes EV adoption is gaining unprecedented momentum despite many challenges. Deepak, in the upcoming Union Budget 2022, is expecting the Finance Minister to address the critically-important area of making wide and varied range of financing options available for EV commercial vehicles' buyers. “This is extremely critical for further increased uptake of EVs in India, going forward,” he states.

“To this end, the Government should make the EV sector a priority lending sector for the financial institutions. Additionally, reducing the GST taxation on Lithium-ion batteries and EV spare parts and components can also be a great step forward from the EV manufacturing and OEM point of view.

Given that increased adoption of EVs in the logistics and last-mile delivery segment is the need of the hour to reduce Carbon emissions, the Government must also come up with additional sops or incentives for the nation’s fleet aggregators to switch entirely from IC engines to EVs in order to pave a sustainable and zero-emissions future. Last but not the least, we also hope that this Budget answers the need for revitalizing the B2B retro fitment (ICE to EV conversion) space pan-India by bringing retro fitment under the ambit of FAME-II," he states.

Arun Vinayak, Co-founder & CEO, Exponent Energy, "Due to the inverted tax structure that currently exists (where EVs are taxed at 5% and battery packs alone at 18%). Several constraints are placed on new OEMs as well as the development of new models like Battery As A Service.

While the nodal and state level delegation of charging station deployment and policies around that make the process faster, infrastructure spending support for DISCOMS to support EV charging will accelerate deployment of charging stations across the country.

The government has rightly introduced the PLI scheme to foster domestic production of Li-ion cells but the time taken to set up a cell manufacturing ecosystem will take at least 3 to 5 years. In the interim, reducing the import duties on Li-ion cells would greatly benefit EV startups to make EVs affordable and spur consumer demand."

Akash Gupta, Co-founder and CEO, Zypp Electric states, "India is undergoing a massive EV revolution – which will get a further boost in 2022 following the rapid growth of charging infrastructure and advanced EV models. We are optimistic that the government will announce new initiatives to encourage local EV manufacturing, facilitate easy finance, and create an innovative EV ecosystem.

With that said, we urge the government to reduce GST on EV purchases and rentals from 5% to 2%. A reduced GST would allow consumers to smoothly shift to EV. The Finance Ministry can also reduce taxes levied on loans taken to purchase an EV. GST reduction and tax benefits would play a crucial role in making EVs accessible to everyone. Additionally, the government can also subsidise electricity pricing for EV charging to further improvise the existing EV charging infrastructure."