Union Budget: Anticipations of the Indian EV industry; hopes rest on FAME III

As the Indian Electric Vehicle (EV) industry accelerates towards a sustainable future, the stakeholders are keenly watching the horizon of Union Budget 2024 for crucial policy and financial signals. This anticipation revolves around the potential extension of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) II scheme and the unveiling of the eagerly awaited FAME III initiative. Importance of extending FAME II Since its inception in 2019, FAME II has played a pivotal role in the Indian EV market. Industry data indicates that during the FAME II tenure, there has been a substantial increase in the adoption of electric vehicles. An extension of FAME II is crucial as it provides a solid foundation for continued growth. Additionally, industry reports highlight that a consistent policy framework is vital for manufacturers, investors and stakeholders to plan and execute long-term strategies. An extension of FAME II ensures this stability, contributing to sustained industry growth. Furthermore, after examining industry-oriented data, the continuation of FAME II is seen as essential for maintaining financial incentives for EV buyers. This is pivotal for enhancing consumer confidence and making electric vehicles more appealing and affordable in the market. FAME III: Highly anticipated transformative turn As the industry awaits clarity on FAME III, expectations are high for a comprehensive and forward-looking initiative. Among the key anticipations is the hope for enhanced financial support. Stakeholders are looking for increased subsidies and incentives under FAME III to expedite the adoption of electric vehicles, making them more competitive with traditional counterparts. Charging infrastructure development is another critical expectation. FAME III is anticipated to prioritize the expansion of charging infrastructure, recognizing its pivotal role in overcoming range anxiety and promoting widespread EV adoption. Moreover, the industry expects FAME III to incentivize domestic manufacturing of EV components and batteries, aligning with the ‘Make in India’ initiative. This move is seen as fostering self-reliance and growth in the electric mobility ecosystem. Additionally, FAME III is expected to focus on electric two-wheelers and public transport. Anticipated targeted incentives for these segments acknowledge their success and potential, aiming to stimulate mass adoption and contribute to sustainable urban mobility. Expectations on GST reduction: In addition to FAME III, the EV industry is hopeful for a reduction in the Goods and Services Tax (GST) applicable to electric vehicles. A lower GST rate from the existing 18 per cent to a more favourable 5 percent would further enhance the affordability of EVs, making them more accessible to a broader consumer base. This reduction aligns with the industry’s goal of promoting clean and sustainable transportation options. As Union Budget 2024 approaches, the Indian EV industry stands at a transformative juncture. The extension of FAME II, the unveiling of FAME III, and potential GST reduction collectively play pivotal roles in shaping the sector’s trajectory. Beyond contributing to sustainable mobility, these initiatives have the potential to position India as a global leader in the electric vehicle landscape, demonstrating a commitment to a cleaner and greener future. The author is CEO & Co-founder, Neuron Energy. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views. Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.