Union Budget 2019: Auto industry expects smooth road ahead for electric vehicles in India

The electric vehicles industry in India is growing at a significant speed and thus the auto industry is pinning its hope on the upcoming Union Budget 2019.

Over the past two years, India has witnessed a significant development in electronic vehicle space. (Image: AFP)

Union Budget 2019: The electric vehicles industry in India is growing at a significant speed and thus the auto industry is pinning its hope on the upcoming Union Budget 2019. Several industry veterans believe that the government will uplift consumer sentiment and infuse positive environment for the auto industry including electric vehicles. Though various surveys suggest that majority of Indian drivers and vehicle owners would prefer electric vehicles in the years to come, the lack of charging infrastructure and policies have made things a little difficult for the industry to grow at the moment. As per the Society of Manufacturers of Electric Vehicles (SMEV), the sales of electric cars came down to 1200 units in FY 2017-18 from 2000 units in FY 2016-17 recording a slump of 40 per cent. Speaking about the same, Ayush Lohia, CEO Lohia Auto Industries said that the industry is working towards the extension of the incentive scheme for electronic vehicles under the faster adoption and Manufacturing of Hybrid and Electric vehicles policy. “It is hoping for a positive response from the upcoming union budget with a minimum 10 years extension, therefore, making it long term. This extension will lead to achieving India’s electric vehicle target which in turn will undoubtedly help in reviving of the industry,” he said. Also, incentives Under FAME Policy should include all-electric vehicles and not limit incentives to only Advanced Batteries like Li batteries, he said. “We are positive that the new budget will include Lead Acid Batteries in 2 wheelers and 3 wheelers and not be limited to registered vehicles only like in Electric 2 wheelers,” he added further. Automobile industry also expects Finance Minister Arun Jaitley to not exceed Goods and Services Tax (GST) on all categories of Electric Vehicles including batteries above 5 per cent with Input Tax Credit availability. Furthermore, the industry also expects that there should be ease of retail finance availability under priority lending same as agriculture sector. Lending options should not be limited to Nationalised Banks but also through Non-Banking Financial Companies (NBFCs) and Private Banks. “In the upcoming budget we are also hoping that Retail Finance with Margin Money will not exceed 10 per cent and sub-vented rate of interest should be kept maximum 5 per cent ROI on all Commercial Vehicles including 3 wheelers,” Lohia said adding that there should be scrap Incentive on all passenger and commercial vehicles under 7 years. Over the past two years, India has witnessed a significant development in electronic vehicle space with companies like Suzuki, Toshiba and Toyota joining forces to produce lithium-ion battery mules in the country. However, till now the major focus for them remains the export markets.