Budget 2023: Industry Seeks More Tax Cuts To Make EVs Affordable To Masses

EV industry is keeping its expectations relatively high for the upcoming Budget to achieve the goal of becoming the largest market. The EV business requires the government to meet crucial expectations

EV industry players want government must expedite electric mobility throughout the country by implementing ease in taxes, investment, and upskilling initiatives.

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According to IBEF, the Indian automobile sector is the fifth fastest-growing in the world, but it is projected to become the third-largest by 2030. Furthermore, the Indian Energy Storage Alliance predicts that the electric vehicle (EV) market will increase at a 36 per cent CAGR. Nowadays, people are becoming more aware of sustainability and taking responsibility for creating a sustainable future. Not only are client needs shifting in this environment, but the government is also developing a reservoir for the sector by launching initiatives to rescue mother earth from carbon emissions, which have become a severe issue in the current day.

Indeed, as we have reached 2023, the Union Budget declaration is just around the brink, and every industry has formed its own wish list for Finance Minister Nirmala Sitharaman. In this regard, the leaders of the EV sector are no exception. Though the industry has high hopes for the government's new Budget, their primary expectation is growth. Furthermore, in order to stay up with the competition, the EV industry is keeping its expectations relatively high for the upcoming Budget of 2023-24. As a result, to achieve the goal of becoming the largest market, the EV business requires the government to meet crucial expectations.

The EV Industry's Top Expectations

Tax Cuts: EV industries have gained substantial traction in recent years. In this context, there is a need to lower taxes in order to make EVs more affordable to the masses. Furthermore, reducing EV charging-as-a-service taxation will encourage more charging point operators to open up stations, removing the concern that customers need more charging stations when adopting EVs. Policies promoting EV use will benefit because EV adoption is limited in India due to a lack of charging infrastructure. The legislation requiring electric vehicle fleets for delivery and hyperlocal businesses, backed up by tax advantages, will be a welcome development. Moreover, tolling for EV fleets for a year could be one method to entice the fleet business to go electric soon. This would lower the operating costs of SaaS providers and enable them to pass on some benefits to customers, helping the entire ecosystem to adopt EVs sooner.

Increased Manufacturing: As a nation, we must strengthen our manufacturing and strengthen our localised supply chains. As a result, the EV industry's market leader believes that the 2023 Union budget should focus on adopting new schemes and policies to encourage innovation and capacity-building, as well as to incentivize EV adoption. Furthermore, it should not be limited to manufacturing additional EV charging stations; instead, it should widen the horizon entirely. As a result, significant investment in infrastructure needs to be made in order to enhance manufacturing. Since the introduction and manufacture of lithium-ion batteries within the country are still in their nascent stages. Therefore, manufacturers should prioritise eliminating working capital bottlenecks, lowering customs tariffs on lithium-ion batteries, improving export and import production, and so on in the government's new budget.

Enhance Incentives and Schemes: There is no denying the fact that the industry has grown enormously since digitalisation took centre stage, offering opportunities for everyone. Leaders anticipate that the new budget will include additional incentives and programmes or modify it according to the industry's need, such as Aatmanirbhar Bharat and Make in India, to enhance the manufacturing process. Incentives for cleaner automobiles and production-linked incentives, among others, to promote electric mobility are instances of innovation and inventiveness. Though just a few plans benefit the established, start-ups, and MSMEs sometimes lose because they lack funding at the commencement. Thus, as the guiding principle in the new Budget plan, the government must expedite electric mobility throughout the country by implementing ease in taxes, investment, and upskilling initiatives.

All Things considered!

In the current context, India has achieved steady progress in the EV market over the last few years. As a result, it is expected that EVs will be one of the key sectors of the upcoming budget to grow the country's economy. As we gear up for the New Year, industry leaders for the upcoming Budget will be looking for tax cuts, an increase in production, as well as stable schemes and incentives as their key expectations. Regardless, all of the initiatives will help to strengthen India's EV industry on a worldwide scale.

Setul Shah is the founder at RunR Mobility

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