Charged up by sops, EV players see ‘beginning of a revolution’

While electric-vehicle (EV) makers and the start-up community have lauded the Budget for announcing steps to boost the e-mobility revolution in the country, traditional automakers said they were disappointed that little had been done for the beleaguered industry.

Two-wheeler companies in the EV sector — such as Hero Electric, Revolt Intellicorp, Ather Energy, Kinetic Green, Tork Motors, 22Kymco and Log 9 Materials — said the Budget announcements would boost their industry.

“This Budget has been very promising for our industry. This is the start of a revolution. We believe that three years from now, things will change rapidly, and India will be ahead of the curve in its (EV) adoption rate,” Rahul Sharma, Founder, Revolt Intellicorp, said.

Similarly, Ather Energy, which is backed by Flipkart co-founder Sachin Bansal and Hero Motocorp, said the income-tax benefit to the end-customer could go up to ₹7,000-8,000 per vehicle.

Tarun Mehta, CEO and co-founder, Ather Energy, said the Budget has addressed concerns on the upfront cost of purchasing EVs.

“This is the best example of a consumer-driven change, and it is also how Ather envisions the EV sector to achieve scale and growth. It now becomes imperative that OEMs (original equipment manufacturers) chalk out plans to allow the industry to scale up and meet the demand for compelling products.”

Deduction on interest

Finance Minister Nirmala Sitharaman, in her maiden Budget, said that to make EVs affordable to consumers, the government will provide an additional income-tax deduction of ₹1.5 lakh on the interest paid on loans taken for their purchase.

“This amounts to a benefit of around ₹2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicles,” the FM said.

She added that the government had already moved the GST Council to lower the GST rate on EVs from 12 per cent to 5 per cent.

The government in April had extended the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME)-II scheme to encourage the adoption of the EVs. Following the approval, the Cabinet also approved an outlay of ₹10,000 crore for a period of three years which commenced on April 1.

The Society of Manufacturers of Electric Vehicles (SMEV), representing the EV industry, said the decision to incentivise EV manufacturing was a move in the right direction. It would help in the creation of a local manufacturing base and encourage component manufacturers to invest in the sector, it said. “Additionally, bringing down the custom duty on lithium-ion cells to nil (zero) would further cut down the cost of batteries and help local battery manufacturers to scale up the business,” Sohinder Gill, Director General, SMEV, said.

‘Not recognised the distress’

However, the Society of Indian Automobile Manufacturers (SIAM), the industry body which represents most of the traditional auto companies, said the Budget was not in line with what had been done by the government during the previous two similar slowdowns.

“It is disappointing that the FM has not recognised the distress in the auto sector and not come out with any kind of support or stimulus,” Rajan Wadhera, President, SIAM, said. “In fact, increasing the duties on auto parts and putting an additional cess on petrol and diesel could drive up the cost of vehicles,” he said.

Plans in motion

The EV-friendly move was also welcomed by companies which have plans to go electric in the near future, or already have such a fleet in their portfolio.

These include Hyundai Motor India (which will launch Kona on July 9), MG Motor (will bring out its eZS in September) and Tata Motors (which already has the Tigor electric). “Private buyers, who were earlier not considered for a subsidy through FAME-II, will now have a reason to seriously consider an EV with the tax exemption of up to ₹1.5 lakh,” said Shailesh Chandra, President, Electric Mobility Business and Corporate Strategy at Tata Motors.

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