Maharashtra State's Minister of Environment, Aaditya Thackeray, has written a letter to the Union Finance Minister, Nirmala Sitharaman, asking for “consistent and radical reforms” in the electric vehicle (EV) sector, which will address a substantial portion of greenhouse emissions and air pollution.
The Environment Minister said that the current reforms at the national and state level in the transportation sector have set the foundation for India’s EV sector, with Maharashtra recording a 153 percent growth in EVs in 2020-2021, albeit on a low base.
I have written to the Hon’ble Finance Minister of India Smt. Nirmala Sitharaman ji a few humble suggestions to give a boost to the Electric Mobility revolution in India. pic.twitter.com/MstdI20oke— Aaditya Thackeray (@AUThackeray) January 19, 2022
In his letter, he said the cumulative investment in India’s EV sector could go upto Rs 19.7 lakh crore between 2020 and 2030. ‘Banks and NBFCs currently hesitate to lend for EVs due to perceived and real asset and business model risks.’ As a result, EV buyers are not able to get interest rates and tenures comparable to their IC-counterparts. Thackeray requested the Finance Minister to pursue the same with the RBI to make priority sector lending for EVs.
Furthermore, he says that India’s supply chain ecosystem and manufacturing process for EVs require more international exposure. Thus, global companies like ‘Tesla, Rivian, Audi and BMW, among others, must be given time-bound concessionary custom rates for import of vehicles for retail sales. Thackeray also said that the present import duty structure on EVs (CKU, CBD and SKD) is not well-aligned with the EV ecosystem.
Passenger four-wheelers imported into India are currently taxed at 60 percent for vehicles costing below $40,000 or at 100 percent for vehicles with prices above $40,000, irrespective of the fuel type. In a letter to the Indian authorities, Tesla had lobbied a reduction of the customs duty to 40 percent for EVs. However, there is no clear outcome on the request and no clarity has been seen on the EV brand's India entry.