There is plenty in the Budget for electric vehicles and domestic manufacturing, like provisions to further push scrapping of old vehicles and increase in customs duty of imported vehicles
The Indian electric vehicle (EV) market is expected to see 40–45 percent EV adoption for two-wheeler vehicles and 15–20 percent for four-wheel passenger vehicles (PVs) by 2030
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India is walking the talk when it comes to green mobility. On February 1, India’s finance minister Nirmala Sitharaman announced a plan to provide customs duty exemption for importing capital goods and machinery required for the manufacture of lithium-ion cells for batteries used in electric vehicles. “To further provide impetus to green mobility, customs duty exemption is being extended to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles,” Sitharaman said during her speech.
The reduction in cost of manufacturing lithium-ion batteries could directly lead to a drop in price of electric vehicles in the country. “We believe that the thrust on electric mobility is the need of the hour,” says Ramesh Nair, CEO, India & MD, market development, Asia at Colliers. “The Budget provided provisions related to battery production, investment in energy transition, will give a fillip to the EV industry in India.
Between 2023-2027, the EV space in India is likely to see investments of Rs94,000 crore (USD12.6 billion) across the automotive value chain. The Indian electric vehicle (EV) market is expected to see 40–45 percent EV adoption for two-wheeler vehicles and 15–20 percent for four-wheel passenger vehicles (PVs) by 2030, with 12 million to 13 million new two-wheeler EVs and 1 million new 4W PVs being sold in India annually by 2030, according to Bain & Company.
“Considering EV batteries account for approximately up to 60 percent of the EV cost, this relaxation will make electric vehicles more affordable and hence enhance the EV adoption rate," says Pankaj Sharma, co-Founder and director, Log9 Materials.
The adoption of electric vehicles in India has been slower than anticipated due to various factors such as lack of charging infrastructure, higher upfront costs compared to traditional gasoline vehicles, and limited range of available electric vehicles. However, the electric two-wheeler market in India is showing growth potential and is likely to increase in the coming years with the government continuing to provide incentives for electric vehicle purchases and increasing investments in charging infrastructure.