Post Budget reactions from EV leaders.

February 1, 2023
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New Delhi, February 1, 2023:

In the 2023-24 Union Budget presentation, Finance Minister Nirmala Sitharaman declared that the Indian economy is seen as a "bright star" globally, with a projected growth rate of 7%. The government's focus on infrastructure and the exemption of customs duties on capital goods and machinery imports for lithium-ion cell production will benefit the EV sector. Furthermore, the allocation of INR 35,000 crore for green growth, which is a top priority, will not only boost the economy but also support the growth of the EV industry as India works towards becoming net zero by 2070.

With blueprint drawn for India@100 the EV sector is all poised to be the sunrise sector that will drive the growth of the Indian economy.

EV Story reached out to various industry leaders for their perspectives on the budget and their thoughts and opinions on the budget on the allocations made to the EV sector.

Sohinder Gill,  Director General, Society of Manufacturers of Electric Vehicles

"After passing through a difficult period of lack of good quality "Made in India" EV components for the last 2 years, the local supply chains are beginning to take shape, and the increase in customs duty on SKD/CBU is therefore timely as it will further incentivise the local suppliers because of the relative price advantage. There are still many parts of EV componentry such as lithium cells, permanent magnets for electric motors, semiconductors, etc that will need to be imported, and we expected rationalisation of customs duty on such essential imports to help keep the EV prices in check. The continuation of the customs duty-free status for machinery used to produce lithium-ion batteries could result in some stabilisation of battery pricing.

A "Green Credit Programme" to promote behaviour change has been announced as another intriguing proposal. We are awaiting the fine print and anticipate that it will support the creation and uptake of EVs.

Another great idea is to promote hydrogen as a future fuel, especially since India has an abundance of sunshine most of the year and the majority of our goods are transported in heavy-duty trucks that cannot run on lithium batteries efficiently or cost-effectively. We believe both hydrogen and Lithium batteries can co-exist as great clean fuels for the energy and transportation needs of the next few decades."

Vinod Aggarwal, President, SIAM and MD & CEO, VECV

  "33 % increase in capital outlay with an effective provision of Rs 13.7 lakh crores will spur growth in the economy resulting in positive impact on the Auto sector.”

Adding further, he stated, “The Auto industry is fully aligned with the initiatives on Sustainability and Decarbonisation and increased focus on Hydrogen, Ethanol Blending, Bio Gas, Electric Vehicles and Battery Storage. Announcement for funding various Government Departments for replacement of old vehicles is also commended.

Another appreciable feature of the budget is putting more money in the hands of the individuals by some lowering of effective personal income tax rates that should increase consumption and consequently lead to more demand. All in all, this is a growth-oriented budget with positive impact on the Auto Sector.”

Dr. Anish Shah, Managing Director & CEO, Mahindra Group

“This is an outstanding budget as it is disciplined, growth-oriented, inclusive and sustainable. The Finance Minister has done a commendable job by tabling a budget that is big on consistency and driven majorly by capex. The steep increase in capex, to the tune of Rs 10 lakh crore, will ensure the continuum of cyclical recovery. Capex spending is good because it has a higher multiplier effect: every rupee spent on capex has a multiplier of Rs 3 as compared to just about Rs 0.9 for revenue expenditure. That apart, higher capex also creates jobs in the hinterland. The focus on core infrastructure, including increased funding for railways and clean energy, as well as the government's ambitious plans for the agricultural sector, will help to improve rural incomes. Above all, it is encouraging to see the government setting the pace for climate action by announcing a "green budget" that will pave the way for a greener, cleaner planet.”

Sunjay J Kapur, President ACMA

The budget is a blueprint of a digitally enabled, Aatmanirbhar Bharat, coupled with measures that will drive sustainable yet inclusive growth at a rapid pace. Focus on exports, manufacturing, local value addition and encouraging green energy and mobility are indeed steps in the right direction. Further, the proposals for personal Income Tax will put more money in the hands of people thus fuelling consumption leading to economic growth.”

“ACMA is also delighted by the measures announced for skilling and research in hi-tech areas such as AI, Robotics, 5G, Mechatronics and 3D printing, among others. With increasing telematics and software content in vehicles, these measures will ensure that our industry continues to be relevant and globally competitive”.

Mahesh Babu - Chief Executive Officer Switch Mobility Ltd.

“The government’s focus on infrastructure with enhanced capex of INR 2.7 lakh crore for roads and highways and the budgetary allocation for vehicle scrappage, will certainly accelerate the growth of the CV market in India. Meanwhile, in the EV sector, the government’s move to provide customs duty exemption for import of specified capital goods and machinery required for manufacture of lithium-ion cells for batteries is a welcome move, that will play a vital role in making local cell manufacturing cost competitive in the long run. Additionally, green growth being one of the top 7 priorities, with an allocation of INR 35,000 crore, is a step in the right direction. This will not just aid economic growth but will also accelerate the growth of the auto industry, especially EVs, as the country transitions towards net zero by 2070.’’

Ayush Lohia, CEO, Lohia Auto                                                                                                                                                                                                                                                                                                                                                                   
Budget 2023 is extremely supportive of the auto industry as India moves forward with the EV revolution. While the capital investment of Rs 10 lakh crore in infrastructure spending will unquestionably help CV sales, the goal of scrapping all old government vehicles by assisting state governments will increase sales across all segments.

In addition, the struggling entry-level 2W and PV markets will benefit from the lowering of individual tax slabs. Sales of premium vehicles will also benefit from the reduction of the maximum tax levy from 37% to 25%. With an emphasis on electrification, lowering import taxes on lithium ion batteries will help lower the cost of EVs and make them more accessible to the general public.

The updated credit guarantee scheme is also welcome news for MSMEs, who are still adjusting to the effects of the pandemic. It will go into effect on April 1st, 2023, with a corpus injection of Rs. 9000 crore. This will allow for an additional Rs 2 lakh crore in collateral-free credit guarantees, which will allow for a 1% reduction in the cost of borrowing.

Also, the minimum tax slab has been raised to Rs 7 lakh in the new tax regime; this rejig could help bolster disposable income, boosting consumption across segments, including EVs.

Rajesh Jejurikar, Executive Director (Auto & Farm Sectors), Mahindra & Mahindra Ltd

“The Budget has struck the right balance between managing growth and fiscal prudence. The reduction in income tax and other taxes will put more money in the hands of consumers, driving consumption and growth in the economy . The Government’s focused investments in infrastructure will support long term sustainable economic growth. The budget enhances the positive  sentiment in the country when the global environment has uncertainty.”

Manav Kapur, Executive Director, Steelbird International. 

Finance Minister Nirmala Sitharaman has tried to stimulate the auto sector of India with some smart moves in the Union Budget 2023-24. First of all, this budget paves a smooth path for the EV transition by extending the customs duty exemption to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles. Whereas measures announced for skilling and research in AI, Robotics, 5G, Mechatronics and 3D printing will trigger quality production across the sectors, and the auto components industry will also benefit from incorporating these cutting-edge technologies in various operations. On the other hand, the rebate limit on personal income tax has been increased from ₹5 lakh per annum to ₹7 lakh per annum; this initiative will directly affect the demand side with the better purchasing power of potential customers. Moreover, the announcement of replacing old government vehicles will further enhance demand for new vehicles. So, overall it is a smart budget where due attention is given to all the major sectors.

Mr. Ketan Mehta, CEO and Founder, HOP Electric Mobility

India’s fastest growing electric 2-wheeler manufacturer, says "A largely all-encompassing inclusive budget offers something to cheer about for all sectors; emphasis on rural development – where resides the real BHARAT, and Green sustainable climate consciousness is growth focused for a bright future. The Budget will drive economic growth, create jobs and attract investments. Pushing investments in sectors such as agriculture, fishery and cattle, and supporting procurement of components for electric vehicles, and focus on clean energy and fuels like Hydrogen will significantly enhance the prospects of segments that were in need of attention.".

Kapil Shelke, Founder & CEO, TORK Motors

“The changes in the Income tax slab structure has enhanced the purchasing power of the populace. This move will encourage the adoption of cleaner, cost effective means of travel for their daily commute and the availability of FAME-II subsidy will further boost the sales of electric vehicles in the coming fiscal. Additionally, the extension on customs duty on the import of capital goods and machinery for developing lithium-ion cells would also enable EV manufacturers to localise their products in the long term, leading towards reduction in the cost of an electric vehicle for the consumer in the years to come, particularly for a brand like ours that are 95% indigenously manufactured in India."

Stefano Sanchini Managing Director, Bridgestone India

“The Government’s proposal to increase the capital expenditure outlay by 33% is a welcome move as this will directly impact the logistics and mobility sectors. These sectors would also grow as they expand to serve the enhanced demand for goods generated by new infrastructure projects.  The Finance Minister’s statement on replacing old government vehicles will increase the demand for new vehicles and we are committed to supporting the OEMs meet this demand.” 

Kaustubh Dhonde, Founder & CEO of AutoNxt Automation 

The Union budget clearly shows the commitment of the central govermment to achieve the net zero emission goal of 2070. The budget expectations that we had from EV industry perspective will completely be met if the implementation of the budget is done properly at grass root level. Both the incentives and packages defined for Agritech and EV related innovations in the country are truly promising to expect high growth from the rural to the urban areas. 

Startups/MSME's working in these two areas are the real catalyst for the growth of the entire nation, so it will be interesting to look at how smoothly they are provided access to the benefits announced in todays budget. After listening to the budget today, we can say that, India as a nation is truly spearheading the innovation required to fight climate change in all sectors and it is hardly a matter of few years now, when India will be know as the leader in making the right efforts to save the planet from the climate change challenges it is going through, exactly like now it is known for saving the world from the threat of covid by supplying the vaccines.

Nitin Kapoor, Managing Director of Saera Electric Auto Private Limited
"We welcome the announcement made on Budget 2023-24 especially for the EV sector. One of the most significant announcements was the customs duty removal on capital goods imported for the manufacturing of lithium-ion batteries, which would eventually help reduce the cost of electric vehicles in the country. Indirect tax proposals by the government would boost green mobility and the electric vehicle sector in the country. In addition, support for viability gap funding for battery storage solutions with a capacity of 4,000 MWh and a reduction in customs duty on lithium-ion batteries for one more year will bring us close to a net-zero carbon emission goal by 2070. But the most significant step in this realm is the allocation of Rs 35,000 crore as priority capital investment towards energy transition and achieving net-zero carbon emission. This massive investment will emerge as fuel to India's sustainable development goals and from providing acceleration to the EV industry. Furthermore, a scheme announced to scrap old vehicles and replace them with better ones, most positively with EVs, is a welcomed decision. The intention to encourage a zero-carbon strategy in the auto sector for the long term came out loud and clear in the budget. It will help OEMs to push for greener mobility solutions in the country and could facilitate the auto industry's transition to cleaner mobility.

Ankit Mittal, Co-founder and CEO of Sheru

"For clean energy and e-mobility, Budget 2023 has several benefits that carry forward the momentum. Electric vehicles need further cost declines in battery and electronics to increase consumer uptake. The custom duty reduction on the import of capital goods and machinery for li-ion battery manufacturing and subsidy on the import of lithium-ion cells being extended by another year will ensure that this cost decline continues.

While clean energy has been rising rapidly in recent years, lack of storage and outdated transmission infrastructure has been slowing its growth. The budget addresses these through a large CAPEX allocation for modernising and strengthening the green power infrastructure. In addition to this, there is also viability gap funding for battery storage and 35,000 crores allocated towards green energy transition.

India’s mobility and energy sectors are witnessing rapid transformations and moving towards a zero-carbon future. Budget ’23 has provided a boost to aid that" said Ankit Mittal, CEO of Sheru.  

Jeetender Sharma, Managing Director & Founder, Okinawa Autotech

“Okinawa Autotech welcomes the government’s focus on sustainable growth under the spirit of Amrit Kaal. The elaborate focus on capital expenditure, infrastructure development, green growth, rural development health, education and skilling will support the nation to play a dominant role in the new world. We compliment Finance Minister for providing a big boost to green mobility. The reduction of indirect taxes from 21% to 13% as well as exemption on custom duties on capital goods and machinery required for the manufacture of lithium-ion cells will lead to faster adoption of electric vehicles in the country. This will further aid the development of an efficient EV ecosystem. Further, the push for the scrappage policy will support the overall growth of the entire automobile sector. The budget outlays the strong foundation for India’s long-term vision under ‘panchamrit’ and net-zero carbon emission goals for 2070 to usher in a green industrial and economic transition. We also believe that the relief in personal income tax will improve the consumer confidence & purchasing power in the country.”

Samrath Kochar, Founder & CEO of Trontek

The budget is pragmatic and has taken the right steps towards advancing green mobility adoption in the country. Extension of customs duty exemption on Li-ion cells and removal of customs duty on imported machinery used for manufacturing Li-ion batteries will bring down the cost of EV batteries thereby reducing the cost of EV adoption. Going forward, we are certain that the Government will also look at bringing a PLI scheme for battery pack manufacturers and also reduce GST on batteries to benefit the many MSMEs operating in the EV sector." - Mr. Samrath Kochar, Founder & CEO of Trontek, India's largest Li-ion battery manufacturer

Dr. Amitabh Saran CEO and Founder of Altigreen -

“We welcome Budget 2023-24 and the government's dedication to promoting environmental sustainability, as stressed by Finance Minister Nirmala Sitharaman. The announcement of the extension of subsidies on Electric Vehicle batteries for 1 more year coupled with the decision to continue the concessional duty on lithium-ion cells for batteries for another year is helpful; however, we look to the government to extend these for 3 years to provide a stable policy environment for the industry.”

Sumit Mittal, COO & Director of Finance, GreenCell Mobility

We congratulate the government on coming up with yet another progressive growth led budget with a huge emphasis on sustainability and significantly increased capex outlay on energy transition which will spur investments and skill development in the Green economy. Steps taken towards enabling ease of doing business should catalyse much desired private capex cycle. Initiating viability gap funding for battery energy storage systems will kickstart creation of this critical infrastructure. Custom duty reduction on capital goods for Lithium batteries manufacturing will facilitate faster adoption of EVs.
We hope that the classification of priority sector lending for EV financing and extension of FAME scheme will be taken over the course of the year”.

Mohal Lalbhai, Founder and Group CEO – Matter.

The Union Budget 2023 injects growth into India's economic trajectory and reaffirms the government's commitment to the Indian electric vehicle sector. Having "Green Growth" as one of the budget's foundational pillars made the government's environmental awareness immediately evident. Multiple schemes mentioned by the government will play a key role in boosting EV adoption in India to help the nation head into the net zero "Panchamrit" goal by 2070.

The indirect tax proposal and the proposal to continue the concessional duty on lithium-ion cells for batteries augur well for the sunrise industry, as it will help promote green energy and mobility, boost domestic manufacturing, encourage exports, and push greater adoption of electric vehicles. The other schemes mentioned in the budget to support government bodies in replacing their old polluting vehicles will also help us witness a positive trend in the sale of automobiles in the country, including EVs, as the government is committed to shifting to green fuels by 2030.

Rajeev Singh, Partner and Automotive Sector Leader, Deloitte India 

Despite all the uncertainty globally, todays Budget is very progressive, future looking and should drive consumption. From Auto Sector perspective, the increase in outlay for Capital Spending, increase in spending on Infrastructure, setting up 50 new Airports, creation of 100 Transport Infrastructure projects, central support for replacing old vehicles should all drive demand of vehicles. Focus on Agriculture & Rural India are also all steps in reviving rural economy which impact 2W and entry level cars. Overall the focus on Green India should also assist in transitioning of Auto Industry to Clean Mobility.

Shamsher Dewan, Senior Vice President & Group Head - Corporate Ratings, ICRA Limited

"Multiple proposals in the Union Budget are seen favourable for the automotive sector. A sharp 33% increase in capital investment outlay, identification of critical transport projects for first and last mile connectivity, and relaxation in personal tax rates shall aid the demand for the auto sector. Thrust on green energy continues with specific budgetary allocation for old vehicle scrappage, energy transition, and viability gap funding for battery storage solutions with 4000 MWh. Customs duty exemption on the import of capital assets for manufacturing lithium-ion cells for batteries used in electric vehicles shall facilitate EV ecosystem development and aid faster penetration. An increase in the duty rates on compounded rubber from 10% to Rs. 25 (or) 30 per kg, whichever is less, is a challenge for tyre industry, which significantly depends on imported rubber."

Visakh Sasikumar, CEO & Co-founder, Fyn mobility

This is undoubtedly a future looking announcement which will help India to become one of the prominent players in green hydrogen space and thus reducing the dependency on lithium. With the budget allocated to energy transition we will see a lot of businesses turning to EV fleets. Green credit system will ensure that the startups and MNC’s who is working for making the planet a sustainable place to live are incentivized

The viability gap funding will ensure that new battery tech will get supported in the early days before it attains economies of scale.Customs exemption on capital goods and machineries for lithium batteries will reduce the per kilowatt-hour cost of batteries and thus accelerate EV adoption in both personal and commercial segments.

V G Anil Head Operations ARENQ

“We welcome the government’s decision to allocate Rs 35,000 Cr for energy transition, & viability gap funding for battery storage. The steps will enable growth in renewable energy capacity additions & grid stability. Viability gap funding for a battery storage capacity of 4000 MWh can bring about a capex of around Rs 15,000 Cr leading to lower tariffs for storage-linked project bids. We also look forward to FM’s announcement for formulating a detailed framework for pumped storage projects which will prove a catalyst to the whole process.

Sakshi Vij founder & CEO Myles Cars
The Budget presented is positive and growth focussed. The focus on Green Energy adoption through the Green Credit programme will be a welcome move. If this program is able to assist EV financing, we see this as being a significant boost to accessibility in Electric vehicles for a variety of mobility solutions. The increase in Capex budgets by 33% along with Rs. 35000 crore proposal for Energy transition are both welcome steps for the mobility space enabling greater scope for innovation and growth.

Rajat Verma CEO & Founder Lohum
The focus on energy transition is heartening and in line with the Prime Minister's stated views. Viability Gap Funding for BESS will certainly make renewable energy storage a reality. We congratulate the Finance Minister on her progressive Budget.

Saurav Goyal, Co-Founder, and COO of Metastable Materials

 “The government has allocated Rs 35000 crore to achieve the energy transition and net zero objectives which will help the EV industry to work alongside them in fighting this war against the Climate Crisis, However, 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,” 

Hitesh Garg, India Country Manager, NXP Semiconductors.

The government has brought a progressive budget that will support green mobility and innovation in the automobile sector. Major steps like National Green Hydrogen Mission and extending the subsidy on EV batterieswill help the country to have a seamless transition towards a low carbon intensive and fossil fuel dependent economy, empowering the country to achieve its net zero goals.

The three centers of excellence for artificial intelligence to enable 'Make AI for India' and 'Make AI work for India' will stimulate an effective AI ecosystem and nurture quality human resources in the field of technology. It will also boost the Public-private partnership in conducting research and developing cutting-edge applications and scalable solutions across industries.

Anshul Gupta, Managing Director, Okaya Electric Vehicles

“The Union Budget 2023-24 is pro-development, with sustainable planning; energy transition for a cleaner tomorrow and inclusive growth through tech-enabled economy at its core. Moreover, the impetus on the EV sector in budget is quite encouraging for all Industry players.  Drawing from its core, the decision to exempt Lithium-ion cells of custom duties for another year is a welcome move, as its majorly impacts the affordability of EVs in India. Furthermore, the viability gap funding announced to support the Battery Energy Storage Systems, along with a framework of Pumped Storage Projects, is designed to reduce the revenue required to recover costs and offer better returns, especially for the Private sector.”

Harsha Bavirisetty, Co-Founder of Biliti Electric 

It is good to see “Green Growth” among 7 priority areas announced in the budget by the FM. Rs 35,000 crore has been allotted for priority capital investment in the green energy transition. This is in the direction of India seeking a leadership role in mitigating the global climate crisis. India plans to electrify 70% of commercial vehicles, 30% of passenger cars and 80% of total 2Ws and 3Ws by 2030. Our Li-ion battery demand is currently 3 GWh and is set to grow to 70 GWh by 2030. At present, we are importing almost 70% of our Li-ion cell requirement from China and Hong Kong. With customs duty exemption being extended to import of capital goods and machinery required for manufacturing of lithium-ion cells for batteries used in EVs, the government is clearly encouraging local cell manufacturing in the country and reduce dependency on imports.

Complementing this with steps such as tax subsidies and development of special economic zones/lithium parks across the country to promote investments in raw material refining and cell manufacturing capacities and continued PLI schemes and subsidies for cell manufacturing will be a key.The FM also announced the viability gap funding for battery energy storage systems with a capacity of 4,000 MWh (megawatt hour). Along with usage of energy storage systems by residential, commercial or industrial consumers, it is also important to think about a framework to give a push to battery swapping network for electric vehicles during off-peak periods.

However, there was no mention of any extension to the FAME scheme which is set to expire by Mar’24. It is important to continue the scheme for few more years to sustain the growth momentum until we reach an inflection point and gain critical mass for electric vehicles.

Irfan Khan, Founder and CEO of eBikeGo 

Being a prominent player and a visionary in the electric vehicle space, we are thrilled with the government's commitment to promoting environmental sustainability through the continuation of concessional duties on lithium-ion cells for batteries. This move not only shows the government's dedication to reducing the carbon footprint, but also recognizes the importance of the EV industry in creating employment opportunities and promoting green growth. The growth of the EV industry has been nothing short of phenomenal, and with the support of the government, it is poised for even more substantial growth. This budget announcement is a clear indication that the government recognizes the potential of the EV industry and is committed to supporting its growth. I am confident that this support will go a long way in fostering innovation and development within the industry. It will also provide a much-needed boost to the development of charging infrastructure and other essential components of the EV ecosystem.

In conclusion, with the promising announcements made in this budget, we are excited about the future of the EV industry and I am confident that with the government's support, the way forward for players like us will be a smoother ride.

Mr. Raj Mehta, Founder, Greta Electric Scooters.

We at Greta Electric Scooters heartily welcome the Budget the Honorable Finance Minister presented. While there is no major announcement for the EV sector, the Budget's focus on green growth involving energy transition, achieving the net zero target of 2070, is encouraging for the industry. Initiatives will not only help reduce carbon intensity but will create employment. Exemption of customs duty is another welcome move. Another element that resonated with me was the Green Credit Programme I believe this will add fuel to companies' endeavour to adopt green practices, and it will contribute effectively to reducing our carbon footprint. Finally, the reduction in Income tax slabs is definitely something to cheer about.

Narayan Subramaniam, Co-Founder and CEO, Ultraviolette Automotive 

"Electric mobility is the future, and policy support is essential for the growth of our EV ecosystem. The announcement in the Union Budget of  extending concessional duty for lithium-ion cells will give an impetus to Indian manufacturers. With respect to the removal of customs duty on capital goods imported for manufacturing lithium-ion cells, this is a positive step, likely to benefit the Indian EV ecosystem in the long run. As we take strides towards achieving the Net Zero carbon emissions target by 2070, the continuation of such forward-thinking policies will be key to establishing India’s technology and manufacturing prowess on the world map."

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