With the Indian Budget just days away, the electric vehicle (EV) industry is brimming with hope that the government will come up with a slew of measures to boost the industry’s prospects in the Indian market.
This is especially in the wake of the slower EV sales in June 2024 compared to a month earlier.
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FAME-III likely?
The industry is hoping that the Centre will go ahead with its plan to roll out the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-III) in India.
It is also upbeat that the government will pave the way for funds for public charging infrastructure, incentives for localising components, and reducing goods and services tax (GST) on EVs, among others.
R&D, FAME scheme expansion
The industry hopes that the new FAME scheme will expand to include private buses and commercial vehicles (CVs), which is currently limited to state transport undertakings (STUs).
Moreover, if the government supports research and development (R&D) for the battery industry and reduces import duty on electric vehicle components, it will give a fillip to EV manufacturing, thus creating jobs.
The FAME Scheme, initially launched in 2015, promotes electric and hybrid vehicle adoption in India and has seen two versions — FAME-I and FAME-II.
EV adoption in India surged 48 per cent in 2023, mainly due to government subsidies like FAME-II.
Reducing GST on EVs
The Centre must consider reducing GST rates on EV components and batteries (from the current 18 per cent to 5 per cent), said an automobile industry veteran.
This tax rationalisation will help check price rises, making EVs affordable. High EV price is one of the biggest barriers to its sales. This is especially evident in the recent months.
Reducing GST on EVs will automatically bring down the cost and make them at par with traditional-fuel vehicles. This is set to attract buyers in a big way.
EV sales fall globally
In the last few months, we have seen global as well as Indian electric vehicle sales go on a downward trajectory.
For instance, India’s EV two-wheeler market has seen registrations falling by a whopping 27 per cent in May compared to the previous year.
Bhavish Aggarwal advises
Ola Electric founder and chief executive officer (CEO) Bhavish Aggarwal wrote on X (Formerly Twitter) asking EV firms to concentrate on products and supply chain rather than marketing.
Reasons for slow growth
Capital costs and a lack of rapid-charging stations are the main reasons for the slow growth of EVs globally.
Way ahead for EVs in India
It can be said that the Indian government is keen to promote EVs in the country and achieve Prime Minister Narendra Modi’s dream to have 30 per cent EVs on the road by the year 2030.
E-Vroooom’s views
With the Union Budget just days away, the hopeful EV industry has reasons to believe that the sector will thrive, especially because of the Prime Minister’s push and also the promise made by Union minister Nitin Gadkari that the price of electric vehicles will be the same as internal combustion engine (ICE) vehicles in the next two years.
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