Energy

The 2021 Electric Vehicles Industry’s Budget

Summary

On 1st February 2021, Nirmala Sitharaman, the Finance Minister, is going to present the Union Budget. This is the first budget after the coronavirus pandemic, and it is expected to attract stakeholders such as electric vehicles and renewable energy sectors. […]

On 1st February 2021, Nirmala Sitharaman, the Finance Minister, is going to present the Union Budget. This is the first budget after the coronavirus pandemic, and it is expected to attract stakeholders such as electric vehicles and renewable energy sectors.

In the first half of 2020, the production and sales of electric vehicles were heavily interfered with. This results from lengthy lockdowns and an inadequate workforce caused by many people moving from the cities. In India, the electric two-wheeler’s sales decreased from 27,224 units in 2019 to 25,735 units in 2020, representing a 5.46% decrease.

 Many automakers expect that the sale of electric vehicles in 2021 would rise. The EV industry wants to be on the top lending list to promote e-mobility in India. The industry also expects the government to give EV producers incentives to speed off local electric vehicle manufacturing and decrease the Goods and Services Tax (GST) on battery trade.

Naveen Munjal, Hero Electric’s Managing Director, wants the EV industry to be included in the priority sector lending list to help customers purchase electric vehicles for commercial purposes. He added that the government also needs to focus more on the current Faster Adoption and Manufacturing of Electric Vehicles in India. This means the government has to start the FAME II program or revive FAME I. The GST on battery exchange has to be decreased from the current 18% to 5%. To speed off fast EVs’ adoption, the government can include the electric vehicle industry in the Swatch Bharat Mission under the Clean Air and Corporate Social Responsibility programs.

The FAME program was deployed on 1st April 2019 and was to run for three consecutive years.  It was allocated a total of $1.41 billion. Munjal’s views were endorsed by Mohal Lalbhai, Matter Founder and Chief Executive Officer. Lalbhai said that the government needs to be clear on the electric vehicle models that are eligible for subsidies.

Weletric Founder and CEO Vikas Jain said that the government has to decrease the GST on EVs spare parts, batteries, and chargers to 5% from the existing 18%. He added that since the lithium-ion batteries are imported, the import duties require to be as low as possible to speed off the lithium-oil batteries’ local production. Deepak MV, Etrio Co-founder and CEO, said that the government should ensure that there is enough charging infrastructure. The Co-founder and CEO of Yulu noted that the government should give directives to the banks, urging them to offer loans for EVs procurement at lower interest rates.

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