Budget 2019: FM backs EVs but no sops announced

In the union budget announced today, finance minister Piyush Goyal reaffirmed the government's push for electric vehicles and of making India a pollution-free country; but did not announce any sops to boost EV adoption.

"This (pollution-free) India will drive on electric vehicles with renewables becoming a major source of energy. India will lead the world in the transport revolution through electric vehicles and energy-storage devices, bringing down import dependence and ensuring energy security for our people," Goyal said while presenting Budget 2019.

The auto industry was left wanting for a concrete announcement that would further the government's vision for clean energy and provide impetus to the country's fledgling market for electric vehicles.

"The EV industry welcomes our finance minister’s commitment towards making the country pollution-free. We hope the government would soon announce a concrete plan of action with its time-bound implementation in order to fulfil its stated vision," said Sohinder Gill, director general, Society of Manufacturers of Electric Vehicles (SMEV). "SMEV strongly feels that an initial high dose of incentives and actions must be taken in the next year or two years to re-launch the electric mobility mission that has sort of lost steam in the recent years due to flip-flop of policies,” he added.

"As per the 2019 budget electric vehicles are a key part of the government's vision for 2030. However considering the environment concerns, we were hoping for something concrete in the budget. Moreover, to meet the target of 2030 the government needs to plan today instead of giving the electric vehicles a push at a later stage," said Ayush Lohia, CEO, Lohia Auto Industries.

However, the government recently announced a reduction in customs duty on import of parts and components of electric vehicles in an effort to boost local assembly. The duty on import of EV components have been lowered to 10-15 per cent, from 15-30 percent while the import of battery packs for EVs or hybrids now attracts a duty of 5 percent.

"Although the recently announced cut in customs duty on certain electric-vehicle components will augur well for EVs during the longer term, there could have been more done in this regard to make India adopt EVs at a faster rate. We hope these factors, including charging infrastructure, will be addressed in the FAME II policies to be announced soon,” said P Balendran, Executive Director, MG Motor India.

The country's apex automotive body – Society of Indian Automobile Manufacturers (SIAM) – appreciated the emphasis laid on electric mobility; but called for a rollback in the duty hike on import of lithium-ion battery cells, which was increased from nil to 5 percent. "Since cell manufacturing is at very nascent stage, at present, in India, the current practice of importing cells is expected to continue; and hence the change will only lead to increase in cost of manufacturing electric vehicles' battery packs, which is expected to be dampener in generating demand for electric vehicles," SIAM said in a statement.