Union Budget 2023-24: Not Favourable For EV Ecosystem?

The Finance Minister, Nirmala Sitharaman presented the Union Budget 2023-2024 at a time when the Lok Sabha elections are slated for next year. So, it has been a balanced one that has kept the requirements of the common Indian in mind.

Automotive experts say that the Budget 2023-24 is aimed at higher tax savings and needs to be analysed both for its short-term and long-term impact on the country and its economy.

Sohinder Singh Gill, CEO of Global Business at Hero Eco & Director- General of SMEV (Society of Manufacturers of Electric Vehicles), said, “The budget should be a platform to announce the Government & Country’s intentions towards a goal. It should also be a platform for long term thinking about such radical or disruptive change, not just for one year of horizon. For example we don’t know if the FAME policy is going to be extended next year or not,”

The government has reduced the Custom duty on lithium-ion battery manufacturing from 21 to 13 per cent. so, the electric vehicle prices are expected to go down but not so significantly.

Nikhil Gupta, Director of Sales, EVCS and PVI Business at Delta Electronics India, mentioned that electric vehicle prices will not go down significantly. The custom duty has been reduced on the capital goods and machinery, so this only have a positive impact if people produce Li-thium cells locally in India, then the Electric Vehicles (EVs) prices may come down two years down the line.

Commenting on the increased custom duty on fully imported luxury cars & EVs from 60 to 70 percent, Gill added, “The luxury carmakers are not price sensitive to fluctuations and small duty changes. They should feel pinched, if they are spending on luxury, they should be able to afford more and give something back.” he also emphasized that this would also increase more localisation.

Electric mobility has been derailed for the last 4-5 months and the government is now pushing for alternative fuels like hydrogen, flex, ethanol, etc…so, there is still a confusion as to which is better which not, to achieve net zero.

Adding to this, Dutta said, “I would be happy when the Government presents the budget next year, they should do a report card of all the initiatives that have been announced in this budget. Our thinking is great and in the right direction, but the challenge is the implementation & executive at the ground level.”

Overall, all the panelists said that it is a forward-looking budget, some punitive actions have been taken and it is in line-in with what was expected and gave a thumbs up to the budget 2023-24.