Finance Minister Nirmala Sitharaman said on Tuesday that the government will introduce a battery replacement policy to boost the electric vehicle (EV) ecosystem. However, when it comes to buying electric vehicles, the budget doesn’t mention the availability of ease financing, which is the industry’s biggest demand for that budget.
“The policy is being introduced given the space constraints for setting up charging stations in urban areas,” Sitharaman said in her Budget 2022-23 speech. FM also said that the government will develop interoperability standards.
For the past few weeks, EV players have been saying that the government could consider including EVs in priority lending to help citizens buy EVs at lower interest rates. In a recently released report, government think tank Niti Aayog has said that the electric vehicle financing market for banks and non-banking financial companies (NBFCs) could reach Rs 40,000 ($5 billion) by 2025 and Rs 370,000 by 2025 ($50 billion). 2030.
Plug Mobility founder Rajiv K Vij said there were some good announcements in the budget to promote electric vehicles by promoting charging infrastructure and standardizing battery specifications for exchange and interoperability.
“However, the budget misses a major challenge to EV adoption – fleet owners who have suffered huge losses during the pandemic desperately need financing for their fleets and government credit guarantees. The commercial vehicle industry is ready to transition to EVs, but Without easy financing at low cost, this will be further delayed,” Viz said.
According to Rajeev Singh, partner and head of the automotive industry at Deloitte India, the budget also fails to address some of the pressing issues facing the industry – such as lack of direct incentives to drive consumption/demand, lack of EV charging infrastructure and rising commodity prices.
The budget barely mentions demand from the traditional (gasoline/diesel) automotive industry, especially in the two-wheeler segment, which is at an all-time low. The industry wants the government to cut the GST rate on two-wheelers to 18% from 28% to boost demand.
Meanwhile, Sohinder Gill, director-general of the Society of Electric Vehicle Manufacturers (SMEV), said the introduction of a battery replacement policy would incentivize businesses in the business of delivery and ride aggregation to incorporate EVs into their fleets. Samrath Kochar, CEO and founder of battery maker Trentek, said an interoperable battery replacement policy would help ease range anxiety and make EVs comparable to ICE vehicles in the time it takes to refuel. “
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