The electric vehicle (EV) sector in India, witnessing a remarkable rise in sales with EVs accounting for 6.38% of total auto sales in 2023, is looking forward to the interim budget for 2024 with high expectations. The sector has experienced a 50% increase in EV sales over 2022, surpassing 1.5 million units.
This growth trajectory is expected to continue, driven by a focus on electrification, an improving EV ecosystem, reductions in battery costs, and the introduction of new models across various categories.
FAME II Initiative: A Key Driver
The EV sector views the continuation of the Faster Adoption & Manufacturing of Electric Vehicles (FAME)-II Scheme, set to expire in March 2024, as a crucial factor in further propelling EV demand.
The scheme has significantly accelerated EV adoption in India, transforming the industry and creating the potential for over 10 million annual EV sales by 2030. Stakeholders are advocating for the extension and enhancement of the FAME scheme’s budget to maintain this momentum.
Tax Reductions and Infrastructure Development
Industry experts suggest substantial tax and duty reductions on EV components, such as batteries, to improve cost competitiveness. They also call for financial incentives for EV financing, streamlined regulations for new model homologation, and increased funding for EV infrastructure development.
Experts propose reducing GST on electric two-wheelers and expanding charging infrastructure to make EVs more affordable and address range anxiety.
Financial Support and Policy Framework
The sector seeks financial support for EV financing through public sector banks and subsidies at both central and state levels. Experts deem accelerated investment in battery manufacturing and infrastructure support, including urban charging stations, essential for the growth of the electric two-wheeler segment.
Holistic Regulatory Framework
As the EV market expands, stakeholders unanimously agree on the need for a more comprehensive regulatory framework addressing licensing, safety standards, and insurance regulations dedicated to electric vehicles.
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