Electric vehicle transition will accelerate India’s journey to EV

The reduction in customs duty on lithium cells and the subsidy extension on batteries announced by Finance Minister Nirmala Sitharaman on Wednesday welcomed the reduction in customs duty on lithium cells and subsidy extension on batteries.

Kalyan C Korimerla, Managing Director of Etrio Automobiles, told Business Today that the Pro-EV budget focuses on much-needed initiatives such as Customs Duty reduction from 21 per cent to 13 per cent on Lithium Cells and an extension of subsidies on EV batteries for one more year. The policy on the replacement of old polluting vehicles should accelerate the transition to electric vehicles, which is in line with the budget's aim to spur eco-conscious lifestyles. We are happy with the budget because it is inclusive and progressive and will encourage investments in the EV sector. This would make manufacturing batteries cheaper in the long run, according to Varun Goenka, CEO and co-founder of Chargeup.

Goenka said that one of the most impactful decisions this time is the extension of the customs duty exemption for import of capital goods and machinery required to produce lithium-ion batteries for EVs in India. This move will reduce the initial capital investment needs for the battery manufacturers and will make the batteries cheaper as there will be a larger manufacturing base for them. The decision to introduce green credit program will lead to the creation of EVs, according to industry insiders. Pankaj Sharma, the Director of Log 9 Materials said that the launch of a Green Credit program will not only catalyse green technologies but in effect bring momentum towards India's vision to become Net Zero by 2070. He said that while the decision to remove older ICE vehicles will definitely pave way for new EV deployments, investments in the energy storage space will cement the gaps in India's journey towards energy self-sufficiency. Similar thoughts were shared by Visakh Sasikumar, CEO and co-founder of Fyn mobility. He said that with the budget allocated for energy transition we will see a lot of businesses switching to EV fleets. The green credit system will ensure that the startups and MNCs who are working to make the planet a sustainable place to live are incentivised. Finance Minister Nirmala Sitharaman announced in the Union Budget 2023-23 that there would be an allocation of 35,000 crore for priority capital investments towards energy transition and net-zero goals until 2070. The FM also announced that it would support Battery Energy Storage Systems with a capacity of 4,000 MWH with viability gap funding.