Interim budget paves the way for India’s Electric Mobility revolution, say experts

Finance Minister Nirmala Sitharaman presented the last Budget before the country goes to the polls. Being the Interim Budget, there were no major announcements, however, there was still much cheer, with Agriculture, Infrastructure (including housing) and Green ecosystem as the key thrust areas. The Finance Minister also provided growth impetus for the EV sector, as well as for the start-up, Digital, AI, new-age technology sectors. During her Budget speech, Sitharaman stated, “Digital India is key to formalising the Indian economy”, thus emphasising the Government’s commitment to put Digital on the fast track of growth.

The Electric Vehicle (EV) sector has experienced a profound transformation in the calendar year 2023, with notable surges in the two-wheeler (2W) and three-wheeler (3W) segments. Despite reductions in incentives, both 2W and 3W witnessed remarkable growth rates of 33% and 63%, respectively. This surge signifies a pivotal moment where these vehicles are transitioning from being niche products to mainstream options, fundamentally reshaping the automotive industry landscape.

While the four-wheeler (4W) market also saw substantial growth, with a remarkable 109% increase in sales, there are indications of an impending transformation on the horizon. This growth suggests a burgeoning interest in electric four-wheelers, yet challenges and changes are expected to unfold in this segment as well.

In the Interim Budget unveiled today, the Government of India has placed significant emphasis on fostering the growth of the electric vehicle (EV) sector, with a particular focus on bolstering charging infrastructure across the nation. Recognizing the pivotal role of EVs in achieving sustainable and cleaner transportation, the budget outlines a series of measures aimed at accelerating the adoption of electric vehicles and addressing key challenges hindering their widespread deployment.

In her speech, Nirmala Sitharaman said, “Our Government will expand and strengthen the e-vehicle ecosystem by supporting manufacturing and charging infrastructure. Greater adoption of e-buses for public transport networks will be encouraged through payment security mechanism.”

The key points in the Budget:

Accelerated Deployment of Charging Infrastructure: The Government has allocated substantial funds towards the expansion and development of EV charging infrastructure nationwide. With a vision to ensure ubiquitous access to charging stations, both in urban centers and remote regions, the budget earmarks resources for setting up charging stations along highways, public spaces, and residential areas.
Incentives for Private Investment: In order to incentivize private sector participation in the establishment of charging infrastructure, the government has announced a range of incentives and subsidies. These measures include tax breaks, subsidies on electricity tariffs for charging stations, and expedited approvals for setting up infrastructure projects.
Integration with Renewable Energy: In line with its commitment to clean energy transition, the budget emphasizes the integration of renewable energy sources with EV charging infrastructure. This synergy aims to reduce the carbon footprint of electric vehicles and promote the utilization of clean and sustainable energy for transportation.
Regional Focus and Urban-Rural Connectivity: Recognizing the diverse socio-economic landscape of India, the budget underscores the importance of catering to the charging needs of both urban and rural areas. Special emphasis will be placed on enhancing charging infrastructure in rural regions, ensuring equitable access to electric mobility solutions across the country.

Adgully reached out to EV industry leaders to get their insights and reactions to the Interim Budget 2024…

Dr Anshul Gupta, Managing Director, Okaya EV:

“We applaud the announcement by the Finance Minister during the interim budget 2024, signaling a significant stride towards a sustainable future. As a leading EV and charging infrastructure manufacturer, we welcome the Government's commitment to support the sector. This is a testament to the recognition of electric vehicles' pivotal role in addressing environmental concerns and promoting clean energy.

This support will undoubtedly catalyze the development of robust and efficient EV ecosystems, making electric vehicles more accessible and appealing to a broader audience. Our commitment to excellence in manufacturing and technology aligns seamlessly with the government's vision, and we look forward to contributing significantly to the success of this initiative.”

Hari Kiran, Co-Founder and COO, eBikeGo:

“We as an OEM are thrilled with the Interim Budget announced as the Government's commitment to expand and strengthen the EV ecosystem will significantly boost manufacturing and infrastructure development. This will emerge as a notable contribution in achieving Net Zero Goals and lays a solid foundation for sustainable mobility and a greener environment. Also, as highlighted by the Honourable Finance Minister, the new age technologies and data are changing the lives of people and businesses. They are also enabling new economic opportunities as India is showing solutions through innovation and entrepreneurship.”

Akash Gupta, Co-Founder and CEO, Zypp Electric:

“We applaud the government's commitment in the budget to nurturing the Electric Vehicle (EV) ecosystem. The allocation of resources towards the development of a robust infrastructure signifies a pivotal moment for our nation. This budget not only encourages entrepreneurship but also opens doors for a multitude of vendors, providing ample opportunities for supply and installation services. The emphasis on supporting manufacturing and charging infrastructure not only aligns with our company's mission but also ensures a sustainable future for the entire EV industry. Additionally, the focus on creating employment opportunities for the youth, particularly those with technical skills in manufacturing, installation, and maintenance, will catalyze innovation and growth. We look forward to collaborating with the government in realizing this shared vision and contributing to the electrifying transformation of our nation's mobility landscape.”

Rashi Agarwal, CBO & Co-Founder, Zypp Electric:

“As a woman entrepreneur, the post-budget focus on empowering women is truly uplifting. The allocation of thirty crore Mudra Yojana loans reflects a powerful endorsement of our capabilities. The government's commitment to ease of living and preserving women's dignity has led to a commendable twenty-eight per cent rise in female higher education enrolment and forty-three per cent in STEM courses over the past decade. These initiatives are already making a substantial impact on women's workforce participation. Additionally, I applaud the government's forward-looking stance in supporting the electric vehicle (EV) sector. This move not only aligns with global sustainability goals but also presents immense opportunities for women entrepreneurs to contribute to a greener, technologically advanced future. The budget's dual focus on women's empowerment and the EV sector is a testament to our nation's commitment to inclusive progress and environmental sustainability.”

Nikhil Bhatia, Co-Founder, Hop Electric Mobility:

“We appreciate the strategic direction outlined in the Hon'ble Finance Minister's Interim Union Budget, particularly in the augmentation of the EV ecosystem and rural empowerment. The emphasis on EV manufacturing and charging infrastructure aligns with global sustainability goals, presenting investment opportunities. Prioritizing the rural economy, alongside empowering key demographics, reflects a commitment to inclusive growth. Training initiatives for Micro, Small, and Medium Enterprises (MSMEs) to enhance global competitiveness are crucial for economic development. The swift development of digital, social, and physical infrastructure signifies a dedication to creating a foundation for sustained growth. These measures, emphasizing sustainability, inclusivity, and global competitiveness, set a positive trajectory for India's economic future.”

Pragya Goyal, CEO & Co-Founder, Vegh Automobiles:

“The infusion of Rs 30 crore Mudra Yojana loans into the hands of women entrepreneurs is a game-changer, providing financial backing for aspiring female leaders to venture into the dynamic field of Electric Vehicle manufacturing. The commendable 28% surge in female enrolment in higher education, particularly in STEM courses, fortifies the talent pool for the EV sector. As a young female CEO in the EV manufacturing startup, the budget announcements resonate deeply with me. These measures not only empower women in leadership roles but will also contribute to creating a more vibrant and dynamic EV manufacturing landscape in India, presenting a transformative shift for talent acquisition and gender diversity in India's EV manufacturing ecosystem.

The emphasis on bolstering the EV ecosystem aligns seamlessly with our vision for a sustainable and eco-friendly mobility landscape. The move towards net zero emissions by 2070 is not only a commendable environmental goal but also a strategic boost for the EV sector. The planned expansion of manufacturing will likely lead to increased production capacities, fostering innovation and competitiveness. Moreover, the focus on charging infrastructure development is pivotal, addressing a critical aspect that has often been a consideration for potential EV adopters. As a manufacturer, we anticipate these initiatives will significantly contribute to the growth of the electric vehicle market in India, making sustainable mobility more accessible and attractive to a broader consumer base.”

Benjamin Lin, President, Delta Electronics India:

“The Budget 2024 brings a significant boost to the future of mobility. The dedicated support for manufacturing and charging infrastructure is a game-changer, promising exponential growth in our industry. The encouragement for greater adoption of e-buses in public transport networks, coupled with the implementation of payment security mechanisms, not only propels environmental sustainability but also sparks innovation and economic prosperity. This strategic move not only aligns with our values at Delta Electronics India but also signifies a significant leap towards a greener and technologically advanced future for the entire industry.”

Niranjan Nayak, MD, Delta Electronics India:

“I welcome the strategic initiatives laid out in the 2024 budget. The government's strong support for the e-vehicle ecosystem, including manufacturing, charging infrastructure, and incentivizing e-bus adoption, is likely to bring about important changes in our industry. Additionally, the introduction of secure payment mechanisms for e-buses addresses a crucial obstacle to public acceptance. At Delta Electronics India, we understand the transformative potential of e-mobility and are prepared to use our global expertise and local knowledge to accelerate its development. This budget represents a significant step towards cleaner air, sustainable transportation, and a thriving domestic EV industry. We are excited to be part of this journey.”

Hyder Khan, CEO, Godawari Electric Motors:

“Our government is committed to advancing sustainable development by enhancing and strengthening the electric vehicle (EV) ecosystem. Through robust backing of manufacturing and charging infrastructure, they have reinforced the groundwork for a more environmentally friendly future. The focus on creating accessible and eco-conscious mobility solutions underscores the significance of this announcement in the budget. These efforts will enhance EV adoption, paving the way for a cleaner, more interconnected future. The details of this announcement in the forthcoming budget will play a crucial role in steering the country's net-zero agenda in a positive direction.”

Varun Goenka, Co-Founder & CEO, Chargeup:

“Chargeup acknowledges the government's positive strides in the interim budget, marking a pivotal shift towards sustainable practices. As a prominent player in India's electric vehicle landscape, we seamlessly align with the government's focus on expanding the e-vehicle sector and reinforcing manufacturing and charging infrastructure. While we appreciate the commitment to fortify the e-vehicle sector, we emphasize the importance of addressing certain aspects left untouched. The introduction of a bio-manufacturing scheme resonates with our environmentally conscious approach; however, we advocate for a more comprehensive approach beyond subsidies for electric 2&3 wheelers.

The government's emphasis on green energy, encompassing shore-wind energy and coal gasification, mirrors our dedication to cleaner technologies. Nevertheless, we urge a closer examination of challenges such as high GST rates and the lack of affordable financing for critical EV infrastructure, including Battery-as-a-Service facilities and charging stations. Despite our hopes for FAME-III subsidies extending coverage to EV buyers opting for vehicles without batteries, this aspect was not addressed. We eagerly anticipate a more holistic strategy that considers the diverse needs of the entire EV ecosystem. Looking ahead, Chargeup remains committed to collaborating with the government to pave the way for a greener and more resilient future for India's e-vehicle ecosystem.”

Tushar Choudhary, Founder & CEO, Motovolt Mobility:

“We are optimistic about the government’s commitment to enhancing the e-vehicle ecosystem and promoting bio-manufacturing. We see this as a positive step forward and believe that Motovolt is poised to be a key player in this transformative journey. The emphasis on eco-friendly manufacturing is praiseworthy, and as a Kolkata-based company, we are particularly pleased to see the focus on empowering the eastern region of India. Our cutting-edge e-bikes portfolio, aligned with the government’s vision outlined in the interim budget, offers diverse choices to fulfil consumer needs. We are confident that Motovolt’s innovative, affordable, and environmentally friendly micro-mobility solutions will contribute significantly to economic development and environmental sustainability. While we appreciate the steps taken in the budget, we were eagerly anticipating more details on the developments of FAME-III. EV OEMs have successfully revolutionized electric bicycles in India, and we hoped for coverage under FAME-III to help e-bike makers conquer the final frontier of affordability and inclusivity in a much stronger manner in the years ahead.”

Samarth Kholkar, CEO & Co-Founder, Blive:

“We applaud the government's forward-thinking approach in the budget announcement, particularly the emphasis on expanding the electric vehicle ecosystem. The commitment to support charging infrastructure and encourage the adoption of e-buses for public transport networks is a significant step towards a sustainable future. This move not only promotes cleaner and greener transportation but also boosts the growth of companies in the electric vehicle segment. At Blive, we are excited about the opportunities this creates and look forward to contributing to the development of a more eco-friendly and efficient transportation landscape. Additionally, we recognize the vital connection between the development of charging infrastructure and the growth of last-mile delivery services. This integration is crucial for creating a comprehensive and sustainable electric mobility ecosystem that meets the evolving needs of our communities.”

Dr Darshan Rana, Chairman and MD, Erisha E Mobility:

“We are optimistic about measures like the concerted focus of the honourable Finance Minister on promoting electric mobility through the announcement of greater adoption of e-buses, which is truly encouraging for the EV industry and will equally support sustainable transportation solutions. However, there are certain areas where we believe the budget could have been more encouraging. For instance, a more robust policy framework for the adoption of electric vehicles (EVs) and announcements on the related infrastructure development would have been more beneficial for the industry. Additionally, greater incentives for EV manufacturing and research and development (R&D) activities would have further accelerated the growth of the EV industry.”

Anmol Singh Jaggi, Co-Founder and CEO, BluSmart

The 2024 Interim Budget has reiterated the government’s firm belief in the positive impact of promoting electric vehicle (EV) adoption and boosting the charging infrastructure. This aligns with our vision for sustainable mobility and the growth of the overall EV ecosystem. As we move ahead, the adoption of cleaner and green transport alternatives, rationalizing the GST tax structure on EV charging and batteries, coupled with the reinforcement of existing EV policies and the introduction of new ones, will play a critical role in promoting electric mobility and achieving India’s climate goals. India’s target of a 45% reduction in emissions intensity by 2030 requires concerted efforts, and we are eager to contribute to this transformative journey as refreshed by the FMs speech."