Budget must power India’s EV revolution
As India gears up for Union Budget 2024, the electric vehicle (EV) sector stands at a crucial juncture, poised for transformative growth. With the potential to significantly reduce air pollution, cut oil import bills, and create new job opportunities, the EV industry is looking to the government for robust support and forward-thinking policies.
EVs are not merely a transportation evolution; they represent India's commitment to sustainability and energy self-reliance. By reducing the reliance on fossil fuels, EVs can help India meet its climate goals while also improving urban air quality. Moreover, a thriving EV ecosystem could position India as a global leader in clean technology.
Stability Through Long-Term Policies
A unanimous demand from the EV industry is for a longer policy horizon. One of the key expectations from the July 23 Budget is not just the quality of the schemes, but their duration. The sector is calling for a 10-15 year roadmap for EV policies and incentives, which would provide the stability necessary for substantial investments and strategic planning. This approach would transform the EV landscape from one of short-term opportunism to long-term strategic development, positioning India as a global leader in electric mobility.
Cultivate homegrown innovation
Significant investment in research and development (R&D) is essential for India to cultivate expertise in critical EV technologies — particularly in battery innovation and recycling. India must prioritise research in advanced battery technologies to overcome current limitations in energy density, charging speed, and longevity. Developing efficient recycling technologies is crucial for sustainability and reducing dependence on raw material imports. Innovation in charging technology is vital for widespread EV adoption and smart grid integration for efficient energy management. By prioritising R&D and leveraging artificial intelligence (AI) in EV technologies, India can position itself as a global innovation hub in the EV sector.
Boost domestic manufacturing
A robust and well-designed blueprint is crucial for creating a thriving manufacturing ecosystem for EVs and their components in India. This next iteration of the FAME scheme should be more comprehensive and far-reaching than its predecessors, aiming to significantly reduce import dependency, boost domestic production, and generate substantial employment opportunities. By implementing such a comprehensive FAME-III scheme, India can create a robust, and globally competitive EV manufacturing ecosystem. The focus on skill development will ensure that the workforce is well-prepared to meet the demands of this rapidly evolving sector, creating a sustainable and thriving EV industry.
Empowering MSMEs
Recognising the vital role of Micro, Small, and Medium Enterprises (MSMEs) in India's economy, Finance Minister Nirmala Sitharaman should introduce tailored schemes to facilitate their active participation in the burgeoning EV supply chain. The MSMEs have the potential to become the backbone of India's EV manufacturing ecosystem, driving innovation, creating jobs, and fostering local economic growth. To achieve this, a multi-faceted approach is necessary, including easy access to credit, funds for technology upgradation, specialised training programmes for skill enhancement, simplifying regulation for EV startups, support for market access, and export promotion. This approach will not only drive innovation and local economic growth but also ensure a more inclusive and sustainable development of India’s EV industry.
Accelerating corporate engagement
To foster widespread adoption and investment in the EV sector, the government should introduce a comprehensive package of incentives and recognition programmes aimed at corporations. By aligning corporate interests with national EV goals, India can significantly accelerate the transition to electric mobility. Some of the potential measures could include allowing EV-related investments to qualify as corporate social responsibility (CSR) spend, tax incentives for fleet electrification, recognition for EV adoption, and green building certifications.
Charging ahead
The Budget is expected to address this critical need with substantial allocations and forward-thinking policies. Areas the Budget could focus are: a comprehensive charging network across urban and rural areas, offering viability gap funding for charging stations in low-demand areas, mandating EV charging points in new buildings, upgrading power grids to handle increased EV charging loads, incentivising renewable energy-powered charging stations, integrating charging infrastructure with rural electrification programmes, and funding training programmes for charging infrastructure workforce development.
As India stands on the cusp of an electric mobility revolution, Union Budget 2024 has the potential to be a game-changer. By focusing on consumer incentives, R&D investments, manufacturing support, MSME involvement, and corporate participation, the government can drive significant growth in the EV sector. A long-term policy framework, inspired by global best practices, will ensure a stable and prosperous future for electric mobility in India.
(Mohanakrishnan P is Chief Growth Officer, and Balram Nair is COO, 82Volt Technologies.)
Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.