The automobile industry has welcomed the announcement of government expanding and strengthening the electric vehicle (EV) ecosystem by supporting manufacturing and charging infrastructure, in the Budget.

“Greater adoption of e-buses for public transport networks will be encouraged through payment security mechanism,” Nirmala Sitharaman, Minister of Finance, said in her Budget speech.

In her pre-election Budget, the FM also said that blending of compressed biogas into compressed natural gas for transport and piped natural gas will be mandatory.

However, the government has not announced any extension of the Faster Adoption & Manufacturing of Electric Vehicles in India (FAME-II) scheme or the FAME-III scheme. In fact, it has cut the allocation by 44.43 per cent of FAME scheme to ₹2,671.33 crore from ₹4,807.40 crore in fiscal year 2023-24.

In 2023-24, ₹5,171.97 crore was allocated for the scheme that came down to ₹4,807.40 crore in the revised estimates, spent by the end of the fiscal year. In 2022-23, ₹2,402.51 crore was spent under the scheme.

But, the government has increased the budget allocation for the production-linked incentive (PLI) scheme to support the domestic production of futuristic vehicle technologies. It has been raised to ₹3,500 crore for 2024-25 from ₹483.77 crore in 2023-24. It has also raised the budget for the PLI scheme for advanced chemistry cell (ACC) and battery storage from ₹12 crore to ₹250 crore in 2024-25.

Meanwhile, welcoming the announcement on EV infrastructure, 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.”

Shashank Srivastava, Senior Executive Officer-Marketing & Sales at Maruti Suzuki India said that at the moment, one of the hurdles against the faster adoption of electric mobility in India is the lack of charging infrastructure to address consumers’ confidence against range anxiety, and any support from the government will help in the faster adoption of EVs.

“Any support from the government to help build that infrastructure or support the infrastructure or support localisation of battery components would obviously help in the faster adoption of EVs,” he said.

Sudarshan Venu, Managing Director, TVS Motor Company said that it is very clear that the government is committed to developing infrastructure at an unprecedented pace through measures such as the economic railway corridors.

“It is also promoting greener mobility through the push on the entire EV ecosystem from charging stations to manufacturing in India in line with AtmaNirbhar Bharat. This will give our industry a greater fillip,” he added.

This budget not only encourages entrepreneurship but also opens doors for a multitude of vendors, providing ample opportunities for supply and installation services, said Akash Gupta, Co-Founder and CEO, Zypp Electric.

“The emphasis on supporting manufacturing and charging infrastructure not only aligns with our company’s mission but also ensures a sustainable future for the entire EV industry,” Gupta said.

“Lack of charging infrastructure has been perceived by many consumers who intend to buy EVs as a major hindrance, hence focused steps to improve the charging infrastructure will aid in the driving consumption,” Rajeev Singh, Partner and Consumer Industry leader, Deloitte Asia Pacific, said.