Union Budget 2023: Here's What the Electric Vehicle Industry Has to Say

Union Budget 2023: Finance Minister Nirmala Sitharaman has proposed incentives and refunds in the new income tax regime, a boost in capital and infrastructure spending, and the largest-ever outlay on railroads in the Union Budget 2023. In the context of the automobile sector, the FM made a host of announcements, including increasing incentives for electric vehicles, strengthening accessibility of fuel-efficient and electric vehicles, and most importantly, allocation of Rs 35 crore in bolstering the growth of green projects and net-zero emission products. In her budget speech, Sitharaman announced the allocation of Rs 19,700 Crore for green hydrogen production. She has further eliminated custom taxes on equipment and capital commodities used to produce lithium-ion batteries for electrically powered vehicles (EVs). This move will lower the price of EVs in the nation. 

Apart from this, a host of other announcements have also been made concerning the scrappage policy and electric vehicles. Here's what the EV industry has to say about Budget 2023.

Sohinder Gill, Director General, of the Society of Manufacturers of Electric Vehicles (SMEV) said ''Promoting Hydrogen as a fuel for the future is another great idea especially as India is having an abundance of sunshine most part of the year and the majority of our goods are transported in heavy-duty trucks that cannot run on lithium batteries efficiently and in a cost-effective manner. We believe both Hydrogen and Lithium batteries can co-exist as great clean fuels for the energy and transportation needs of the next few decades."

He further stated ''There are still many parts of EV componentry such as lithium cells, permanent magnets for electric motors, semiconductors, etc., that will need to be imported and we expected rationalisation of customs duty on such essential imports help keep the EV prices in check. The continuation of the customs duty-free status for machinery used to produce lithium-ion batteries could result in some stabilisation in battery pricing.''

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Naveen Munjal, Managing Director of Hero Electric said, ''The Budget 2023 reflects the government's inclination to support the EV transition, enabling the creation of a carbon-free nation that thrives on sustainable, futuristic, and alternative fuel technology. We are confident that initiatives under green growth and sustainability will build awareness and help everyone contribute towards a clean and green future.''

Suhas Rajkumar, Founder, and CEO of Simple Energy said, “The budget for FY24 announced by FM Nirmala Sitharaman is encouraging on a lot of fronts, especially in the space we operate in. One of the key focus areas is Green Growth and the schemes announced are promising and we welcome the optimism ignited by the Finance Ministry in this space.'' 

''These progressive schemes will surely enable rapid electrification in the country and encourage consumers to transition seamlessly towards green mobility which will help OEMs to script a robust growth story in the domestic market.'', he added. 

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Narayan Subramaniam, Co-Founder, and CEO, of Ultraviolette Automotive, said, "The announcement in the Union Budget of extending concessional duty for lithium-ion cells will give an impetus to Indian manufacturers. With respect to the removal of customs duty on capital goods imported for manufacturing lithium-ion cells, this is a positive step, likely to benefit the Indian EV ecosystem in the long run.''

Jeetender Sharma, Managing Director and Founder of Okinawa Autotech said, ''The reduction of indirect taxes from 21% to 13% as well as exemption on custom duties on capital goods and machinery required for the manufacture of lithium-ion cells will lead to faster adoption of electric vehicles in the country.'' He further added, ''The budget outlays the strong foundation for India’s long-term vision under ‘panchamrit’ and net-zero carbon emission goals for 2070 to usher in a green industrial and economic transition. We also believe that the relief in personal income tax will improve the consumer confidence and purchasing power in the country.”