EV Industry Expects Bold Reforms & Strategic Allocations in Budget 2024 for Sustainable Growth

Mr. Devndra Chawla, MD and CEO, GreenCell Mobility

In anticipation for Budget 2024, we have focused on essential imperatives that are critical to the long-term development of India’s dynamic electric vehicle (EV) market. One significant recommendation is to secure permanent viability gap funding for financially pressured State Transport Units (STUs) and to develop payment security mechanism to reduce lending risks and improve credit offtake. We emphasise the importance of an infrastructure sector tag for financing to electric mobility projects and propose a capital expenditure subsidy for private bus operators that deploy e-buses on intercity routes. Categorising electric mobility loans as Priority Sector Lending and introducing incentives for battery recycling are critical steps towards lowering interest rates and promoting sustainability.

Standardising Green energy open access rules, toll exemptions for electric buses, optimising charging costs through regulatory measures and opening government electric bus depots to private players are important to creating a suitable ecosystem. Initiatives such as wayside charging infrastructure on national highways, specialised facilities at transport hubs and strategic highway adoption plans for pure electric bus operations will also help sustainable mobility.

We endorse the ongoing success of FAME subsidy, especially FAME 2, with a Rs 10,000 crore budget and recommend FAME-III scheme to further enhance adoption of electric vehicles. Providing capital subsidy to private electric bus operators on inter-city routes will increase adoption on a large scale. The government’s commitment to boosting manufacturing and exports is evident through PLI Schemes for Automobiles, Auto Components, Advanced Chemistry Cell (ACC), and Battery Storage.

To improve cost and sustainability, we strongly propose for a 5% GST on lithium-ion batteries, EV spare parts, components and correcting inverted duty structure in EV production. Standardising battery switching and tackling low-cost finance difficulties are critical for long-term growth. The government’s achievements in alternate fuels, renewable energy, and manufacturing through PLI programmes such as Biofuel Policy & National Green Hydrogen Policy, highlights the importance of these projects.

As the demand for electric vehicle grows, significant coordination efforts are required to build electric mobility infrastructure, particularly charging stations. A strong infrastructure is essential for supporting the industry’s growth. GreenCell Mobility seeks continued support and bold initiatives to take the Indian EV industry to unprecedented heights of success.