The budget 2023 document has unveiled that there is almost a 78% increase in the estimated budget allocation of Faster Adoption and Manufacturing of EV scheme which was Rs 2,908 crore in the previous financial year while for 2023-24 it will be Rs 5,172 crore.
Under the National Electric Mobility Mission, the FAME scheme was launched in April 2015 to promote the purchase of electric and hybrid vehicles by offering financial assistance. The EV sector has pointed out the importance and impact of this scheme earlier also in terms of the growth in this new sector.
Green push
The budget highlighted several plans for India, including the Green mobility initiative, regarding which the union finance minister said that “to further provide impetus to green mobility, customs duty exemption is being extended to import of capital goods and machinery required for the manufacture of lithium-ion cells for batteries used in electric vehicles”.
Even though the EV sector is still at a very early stage in India, many industry insiders believe that the government’s initiatives and announcements made by finance minister Nirmala Sitharaman will fast-track the ecosystem development.
Views from inside
Industry insiders have welcomed the decision to allocate Rs 35,000 crore for energy transition and viability gap funding for battery storage, a major push from the authorities for faster EV adoption while focusing on India’s green initiatives.
Pankaj Sharma, Co-Founder & Director of Log9 Materials told News18 that this year’s budget has mobilized multiple levers towards creating a Green economy which is very promising.
“While the decision to scrap older ICE vehicles will definitely pave the way for new EV deployments, investments in the energy storage space will cement the current gaps in India’s journey towards energy self-sufficiency. Furthermore, the launch of a Green Credit program will not just catalyse green technologies but in effect bring momentum towards India’s vision to become Net Zero by 2070,” he added.
Maxson Lewis, Founder and Managing Director, Magenta Mobility, said that for the developing EV and battery storage industries, the extension of the concessional tariff on lithium-ion cells for batteries for an additional year is necessary and will significantly increase adoption by lowering end-user transition costs.
Sumit Mittal, COO & Director of Finance, GreenCell Mobility, said, “Customs duty reduction on Lithium batteries will facilitate faster adoption of EVs. We hope that the classification of priority sector lending for EV financing and extension of the FAME scheme will be taken over the course of the year”.
Another industry expert, Visakh Sasikumar, CEO & Co-founder of Fyn Mobility, told News18 that customs exemption on capital goods and machinery for lithium batteries will reduce the per kilowatt-hour cost of batteries and thus accelerate EV adoption in both personal and commercial segments.
However, Co-Founder of Metastable Materials, Saurav Goyal, suggested that along with focusing on green energy growth, the government should have also introduced some policies regarding solving the major problem which pertains to the EV industry – recycling of the batteries.
“This will further help the government to eliminate any future hurdle in achieving the net zero target,” he added.
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