Budget 2024: Govt commits to boost electric vehicle ecosystem through infrastructure support

Finance Minister Nirmala Sitharaman, in her Budget 2024 speech today, declared that the government aims to bolster the electric vehicle (EV) ecosystem by providing support to both charging and manufacturing infrastructure across the country. In her pre-election Budget - technically a vote on account and commonly referred to as an interim Budget - Sitharaman emphasised the encouragement of electric buses for public transport networks as a pivotal aspect of this strategy.

"Our government is committed to expanding and fortifying the e-vehicle ecosystem by actively supporting manufacturing and charging infrastructure," stated the finance minister. Additionally, she highlighted the intention to promote the adoption of electric buses in public transport networks through the implementation of payment security mechanisms.

Mandatory Blending and Eco-friendly Alternatives

Sitharaman underscored that the mandatory blending of compressed biogas into compressed natural gas for transport and piped natural gas will be enforced. Furthermore, she announced the launch of the Biomanufacturing and Bio Foundry scheme, aiming to provide eco-friendly alternatives for biodegradable production.

Unmet Expectations and Industry Concerns

While acknowledging positive aspects of the interim Budget, Chakravarthi C, Managing Director of Quantum Energy, expressed some unmet expectations. He particularly emphasised the anticipation for an extension of the FAME II subsidy program beyond its imminent expiration in March 2024. This extension, aligned with the government's ambitious 2030 target of having 30 percent electric vehicles on Indian roads, would have further supported the EV industry.

Chakravarthi also highlighted the potential benefits of a substantial reduction in GST on lithium-ion battery packs and cells, advocating for a decrease from 18 percent to 5 percent. This reduction, he argued, would have alleviated manufacturing costs, making EVs more competitively priced and thereby fostering increased consumer adoption.

The absence of a standardised policy for the battery-swapping market was identified as a missed opportunity by Chakravarthi, PTI reported.

Seafund Co-founder & Managing Partner Mayuresh Raut, on the other hand, welcomed the solar rooftop schemes as a significant boost. Raut emphasised that these schemes not only contribute to meeting clean energy goals but also position India to address the current impediments to wider EV adoption, specifically the charging infrastructure.

Mayank Bindal, Founder & CEO of Snap E Cabs, lauded the government's visionary initiative, stating that it not only accelerates the transition to sustainable transportation but also fosters innovation and job creation within the EV sector.