Budget 2024: Govt commits to boost electric vehicle ecosystem through infrastructure support

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In her Budget 2024 speech today, Finance Minister Nirmala Sitharaman announced that the government aims to strengthen the electric vehicle (EV) ecosystem by supporting charging and manufacturing infrastructure across the country. In her pre-election budget – technically a vote on account and commonly known as an interim budget – Sitharaman emphasized the promotion of electric buses for public transport networks as a key element of this strategy.

“Our government is committed to expanding and strengthening the e-vehicle ecosystem by actively supporting manufacturing and charging infrastructure,” the finance minister said. In addition, she highlighted the intention to promote the adoption of electric buses in public transport networks through the implementation of payment security mechanisms.

Mandatory blending and environmentally friendly alternatives

Sitharaman stressed that transportation of compressed biogas in compressed natural gas and blending in piped natural gas is mandatory. Moreover, she announced the launch of biomanufacturing and biofoundry scheme aimed at providing eco-friendly alternatives to biodegradable production.

Unexpected expectations and industry concerns

Acknowledging the positive aspects of the interim budget, Chakraborty C, managing director of Quantum Energy, expressed some unexpected expectations. He specifically emphasized the expectation of extending the FAME II subsidy program beyond its expiry in March 2024. This extension, in line with the government's ambitious 2030 target of having 30 per cent electric vehicles on Indian roads, will further support the EV industry.

Chakraborty also highlighted the potential benefits of a significant reduction in GST on lithium-ion battery packs and cells, arguing for a reduction from 18 percent to 5 percent. This reduction, he argued, would reduce manufacturing costs and make EVs more competitively priced, thereby increasing consumer adoption.

Chakraborty identified the lack of a standardized approach for the battery-swapping market as a missed opportunity, PTI reported.

On the other hand, Mayuresh Raut, Co-Founder & Managing Partner, SeaFund, welcomed the solar rooftop schemes as a significant boost. Raut asserted that these schemes will not only meet clean energy goals, but will also position India to address current barriers to wider EV adoption, especially charging infrastructure.

Mayank Bindal, Founder & CEO, Snap E Cabs, hailed the government's visionary initiative, stating that it will not only accelerate the transition to sustainable transport but also spur innovation and job creation in the EV sector.

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