Why is this budget going to be special for the EV sector? These are the 5 big reasons.

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The electric vehicle (EV) sector is growing rapidly in India. To promote green energy and environmental protection in the country, special attention is being given to the EV industry. In such a situation, the automobile industry, especially the EV segment, has great expectations from the upcoming Union Budget 2025. Companies in this sector have placed their suggestions and demands before the government.

Need to reduce tax concessions and GST

The main demand of EV companies is that the GST rate on EV batteries should be reduced from the current 18% to 5%. This will reduce the cost of EVs and customers will get more affordable options. Apart from this, there has also been a demand to reduce interest rates on EV loans, so that EV buyers can get financial assistance.

Development of charging infrastructure

A strong charging infrastructure is necessary for the widespread use of EVs in India. Oben Electric and other companies have requested the government to take steps in this direction. A special fund may be announced in the budget for the construction and operation of charging stations.

Domestic Battery Manufacturing and PLI Scheme

Battery manufacturing is an important part of the EV sector. There is a demand to implement the PLI scheme to promote domestic production. Companies like Maxvolt Energy want additional funding and tax exemptions for battery manufacturing and R&D.

Extension of FAME-II scheme

Under the FAME-II scheme, subsidy is available on purchasing EVs. Its expansion and setting of new targets is expected in the budget. This will boost the sale of private and commercial EVs.

Green bonds and long term subsidies

Shalya Gupta, CEO of Credifin Limited, believes that the government can issue green bonds, which will be used to develop EV infrastructure. Along with this, long term subsidy can give new impetus to EV manufacturing.

EV sector's expectations from the government

The government needs to take concrete steps to make the EV sector self-reliant and sustainable. EV companies have demanded investment in R&D, increased subsidies, and incentives for EV manufacturing plants. Apart from this, there is a need to simplify the GST structure and provide tax benefits on EV loans.