India’s first women finance minister, Nirmala Sitharaman, in her maiden budget, has announced that the government will focus on encouraging faster development of the electric vehicle
If you’ve watched the movie Ironman, you must be well familiar with Tony Stark’s famous Audi e-Tron, a fully electric car with amazing speed. We all must have wanted to ride that car at some point.
However, a fast-moving and affordable electric vehicle was a far-fetched dream and seemed too good to be true. But, it looks like we will soon be able to see quite a lot of them on the Indian road, at least that’s what the Union Budget of 2019 suggests.
Automotive industry globally is at the cusp of a major transformation. India’s vehicle market has grown by leaps and bounds due to economic liberalisation, with the electric vehicle being in the spotlight.
Environment pollution is increasing day by day, and with the growing number of vehicles on Indian streets is adding to it. The transportation sector is one of the major contributors to CO2 emissions. India’s greenhouse emissions have grown faster than the country’s population. Therefore, there is an onus to combat climate change by building sustainable smart cities.
The Government of India has been taking concrete steps in addressing climate change by promoting the Electric Vehicles Industry.
India’s first women finance minister, Nirmala Sitharaman, in her maiden budget, has announced that the government will focus on encouraging faster development of the electric vehicle. The government, in the union budget, has allocated Rs 10,000 crore for faster adoption of electric vehicles and has announced upfront incentives for electric vehicles. This will help attract investment for manufacture and ensure clean energy over time.
Below are the following reasons why it’s the best time to invest in an electric vehicle (EV) franchise.
Tax Deduction Incentives
To make EVs more affordable for consumers, the government will provide an additional income tax deduction of Rs. 1.5 lakhs on the interest paid on the loans takes to purchase EVs. Also, the GST on electric vehicles has been reduced to 12% to 5%.
Thus, increasing the demand for electric vehicles, providing a profitable opportunity to EV franchises.
Lower Custom Duty
In the interim budget, the government slashed down custom prices on electric vehicles, to 10-15% from 15-30%, making it more attractive to ship eco-friendly vehicles into the country. The lower duty is expected to encourage automobile companies to enter India and assemble EVs in the country.
Making India the Hub for EVs
The government is focusing on EVs as it holds tremendous potential, not only because it is environment-friendly, but also because India can emerge as a hub of manufacturing which will generate employment and growth opportunities.
According to the economic survey tabled in parliament by the Finance minister, it may not be unrealistic to visualize one of India’s cities becoming the Detroit of the environmentally friendly vehicles in the future.
“For that to happen, appropriate policy measures are needed to lower the overall lifetime ownership costs of EVs and make them an attractive alternative to conventional vehicles for all consumers,” it added.
Increased Availability of charging spots
The survey highlighted that the market share of electric cars in India was only 0.06%, compared to about 2% in China and around 39% in Norway. One of the major reasons behind the lower adoption of EVs is the limited availability of charging infrastructure. It also noted that the long time taken for completely charging EVs was another hindrance to popularising the vehicles.
The survey also stated that access to battery charging facilities must be fostered to increase the market share of EVs. It, therefore, becomes important that adequate charging stations are made available throughout the road networks.
Thus, the government is going to come up with universal charging standards for the country as a whole to enable increased investment in the creation of such infrastructure.
Electrifying India by 2030
The Niti Aayog has recently moved a note to the Finance Ministry calling for the scrapping of all fossil fuel based vehicles by 2030. Earlier, NITI Aayog made a proposal that only electric three-wheelers will be sold from April 2023. The decision has been made with the purpose of reducing carbon footprint and air pollution generated by fuel-driven vehicles
This switch to the electric mode is going to accelerate the demand for electric vehicles and thus providing a huge opportunity for EV franchises.