Economy

EV industry seeks priority lending, sops to charging infra from the Budget

G Balachandar | | Updated on: Jan 20, 2022

| Photo Credit: ADITI SHAH

Also want funding for R&D

As the electric vehicle market in India gathered momentum in a few segments in 2021, various stakeholders of the EV industry have sought additional sops in the upcoming Budget to improve the overall ecosystem for EVs in the country.

Society of Manufacturers of Electric Vehicles (SMEV) has said that several supportive measures of the government to promote E-mobility in the country has led to accelerated growth in the last few years.

However, a lot needs to be done to make the country’s automobiles fully electric, said Sohinder Gill, Director General of SMEV.

SMEV has requested a host of measures for the EV industry in the upcoming Union Budget. It has sought priority lending status for EVs as it will not only help create a robust ecosystem for electric vehicles but also help citizens afford EVs at lower interest rates.

The LED and solar campaigns did wonders for the country, and the same can be attempted for EVs also. “A “Clean Air Campaign” under Swachh Bharat mission will have the potential to raise massive awareness about electric mobility and influence customer attitudes toward adopting electric mobility,” said Gill.

Since R&D in battery manufacturing is crucial in achieving self-reliance, the government could allocate sufficient funds for R & D in a public-private partnership mode with a time-bound objective to create EV batteries that are less dependent on offshore minerals and best suited to the Indian condition. “The current level of research is abysmally low, diluted, and scattered,” he said.

SMEV’s other requests include a citizen reward programme for EV users, skill development and export concessions. Some incentives can be extended in the form of subsidies to be enjoyed by domestic players for exporting such vehicles to get a global stamp on electric vehicles. This is a large space that Indian industries can capture before international players invade the market with cheaper contraptions, the pre-Budget representation said.

GST rate

Debi Prasad Dash, Executive Director, India Energy Storage Alliance pointed out that although the GST rate on EV is reduced from 12% to 5%, GST for advanced batteries in EVs is still on the higher side ranging between 18% to 28%.

“Bringing down GST under the 5% bracket will ensure affordability and a smooth transition towards EVs from Internal combustion engines. Also, Fame II incentives could be extended to charging infrastructure and battery swapping too,” he felt.

Gajanan Gandhe, Country Head, Dana India said the path ahead for EVs looks promising. An increase in tax sops for EVs and charging units will push the sales. Supporting PLI in the battery pack and cell manufacturing is a good step in this direction as the battery accounts for over 40% of the cost of the electric vehicle on average.

Published on January 20, 2022
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