Riding high on sustained growth and affordability, the Indian automotive industry, among various segments, is optimistic about the Government continuing to provide incentives and support for the FAME scheme and electric vehicle (EV) tax exemptions in 2024 and beyond since the subsidy has proven instrumental in fostering industry growth. Industry experts are calling for a more customer-centric approach to the scheme’s implementation, with benefits shared directly with end-users rather than original equipment manufacturers (OEMs). The EV sector is hopeful about a slew of sops that will foster a conducive environment for the growth of electric mobility in India.
Amit Raj Singh, Founder and MD of Gemopai, an electric scooter company hopes the Government will extend the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) scheme beyond 2024 and offer attractive interest rates to financial institutions to promote EV funding. “The companies are also suggesting lowering the goods and services tax on batteries to 5 per cent to make EVs more affordable for customers. “This will further stimulate the increased adoption of EVs in the country,” says Singh.
Anticipation has grown regarding the FAME and EV tax exemption as the EV industry is currently at the forefront of a transformative shift, largely fuelled by government incentives and subsidies, notes Anshul Gupta, Managing Director of Okaya EV. “, there is a collective expectation from EV players and analysts on the alignment of input and output GST rates for EVs and spare parts at 5 per cent, creating consistency between input and output rates,” points out Gupta. Moreover, these government initiatives, says Gupta, if upheld, have the potential to create a positive ripple effect, driving innovation among manufacturers and making EVs a more attractive option for consumers. In essence, a continued commitment to supportive policies can propel India further towards a sustainable and electric mobility future and significantly contribute to making EVs more accessible to a broader segment of the population. The call for additional incentives specifically directed towards Indian OEMs is another key aspect. By supporting domestic manufacturers, the industry believes, Government can catalyse advancements in EV technology and strengthen the indigenous EV industry.However, for India’s electric vehicle revolution to truly shift gears, Uday Narang, Founder and Chairman, Omega Seiki Mobility (OSM) — whose product portfolio spans two-wheelers, three-wheelers and 4-wheelers – is of the view that three factors must align. Namely affordability, accessibility, and sustainability. Narang strongly favours introduction of FAME 3 with clarity on subsidy of electric trucks, in line with the demand for affordability through continued government support like reduced GST on lithium-ion batteries alongside domestic battery manufacturing and skilling initiatives.
Narang’s other expectation on accessibility demands a robust charging infrastructure that reaches beyond metros, powered by clean energy sources and bolstered by open data standards for seamless charging. “Sustainability would involve a focus on responsible end-of-life battery management, with R&D in recycling and circular economy measures leading the way. Prioritizing these pillars is the only way India can unlock the true potential and adoption of electric vehicles,” says Narang As the EV industry gears up for substantial growth in the coming years, Dinesh Arjun, Co founder and CEO at Raptee Energy highlights the imperative of stimulating investment opportunities with encouragement for potential investors, coupled with essential reductions in GST rates for EVs as well as charging stations. For Arjun though, it is also important to ease the burden on the industry through a decrease in import duties on electronic components. Arjun bats for a concerted effort in the Budget towards enhancing the ease of doing business and facilitating the entry of local players into the market as crucial steps. “Addressing aspects like component localization and ensuring easy access to necessary components will empower Indian companies, both large and small, to develop competitive products at competitive prices, further solidifying the sector’s growth potential,” says Arjun.
Despite last year’s commendable 33 per cent surge in EV registrations, the EV industry encounters persistent challenges. Manideep Katepalli, Co-Founder at BikeWo a multi-brand EV dealership identifies a key hurdle like a robust charging infrastructure which becomes critical in inspiring confidence among potential buyers and propelling the widespread adoption of EVs.
“Another barrier remains the relatively higher initial cost of EVs, often deterring consumers,” points out Katepalli. “A supportive regulatory framework coupled with financial incentives aimed at fostering research and development within the EV sector. stands as indispensable pillars. These measures not only drive innovation but also attract investments, creating an environment conducive to widespread EV adoption,” suggests Katepalli. “Ultimately, these strategic initiatives play a pivotal role in establishing an enduringly sustainable and eco-friendly transportation ecosystem,” he adds.
Mayank Bindal, Founder & CEO, Snap E Cabs, an app-based fleet of 100 per cent EVs, agrees that one of the most anticipated schemes to be continued is the FAME II subsidy. “It is expected that the govt will continue this for the next few years in response to decarbonising the environment and achieve the targets of net zero goals,” says Bindal who also prioritises reduction in the GST on the Li-ion batteries from 18 per cent to 5 per cent to reduce the cost of acquiring EV’s. “Since batteries are a major cost component in EV’s, the move to reduce the cost of batteries will make the product more lucrative for buyers,” says Bindal.
The CEO of Snap E Cabs also hopes that the government’s focus on building strong infrastructure continues with efficient investments in energy, especially green energy and sustainable energy. “We look forward to EV financing getting priority sector lending status as the government’s ambitious target of 30 per cent penetration to be achieved by 2023,” Bindal suggests. The CEO of ARENQ VG Anil, a major manufacturer of EV batteries is hopeful that the Budget includes policies that support green initiatives and renewable energy. “A Budget that looks forward to the future could encourage research and development, improve electric mobility infrastructure, and make it easier for people to use sustainable power solutions,” says Anil, who is banking on the Budget to support Arenq’s commitment to make high-quality batteries that are good for the environment.