Government aims at widening and firming up EV ecosystem: Sitharaman

(Image: Moneycontrol)

Finance Minister Nirmala Sitharaman, in her Interim Budget for 2024-25, proposed to expand and strengthen the ecosystem for electric vehicles by supporting the manufacturing and charging infrastructure. In the vote-on-account budget, Sitharaman announced a series of measures to accomplish a “net zero” emissions target by 2070 in order to steer India towards a “greener future”.

“Our government will expand and strengthen the e-vehicle ecosystem by supporting manufacturing and charging infrastructure. Greater adoption of e-buses for public transport networks will be encouraged through payment security mechanism, stated Sitharaman in her speech.

Please follow our live budget blog

She also said that a scheme on bio-manufacturing will be launched to promote “green growth”.

Vinod Aggarwal, President, Society of Indian Automobile Manufacturers (SIAM),  stated, “The announcement on strengthening the Electric Vehicle ecosystem by supporting manufacturing and charging infrastructure, will boost the development and adoption of EVs in the country."

It is to be mentioned that under the payment security mechanism model, bus manufacturers which participate in an 'own and operate' bid will be assured of payments by the state transport undertakings for their services.

In 2023, domestic busmakers such as Tata Motors, Ashok Leyland, JBM, etc., had maintained that well defined payment security mechanism for long-term contracts would support large-scale rollout of electric buses in the country.

"The encouragement of Payment Security Mechanism for adoption of e-buses for public transport networks is also a welcome step,” added Aggarwal, who is also the MD & CEO of VECV.

Auto Industry analysts reckon that the Interim Budget’s strong emphasis on green energy is vital for the growth of e-mobility in India.

Rajeev Singh, Partner and Consumer Industry leader, Deloitte Asia Pacific, stated, “Lack of charging Infrastructure has been perceived by many consumers who intend to buy EV's as a major hindrance. And hence focused steps to improve the charging infrastructure will aid in the driving consumption.

As one of the world's fastest-growing economies, India faces the challenge of balancing economic growth with environmental responsibility. To overcome this challenge, the government has set an ambitious goal of 30 percent electric vehicles (EV) on the road by 2030.

The top highlights from the Interim Budget 2024

Dr. Anshul Gupta, Managing Director, Okaya EV, while applauding the announcement, stated, “This support will undoubtedly catalyse the development of robust and efficient EV ecosystems, making electric vehicles more accessible and appealing to a broader audience.”

Some auto component manufacturers reckon that the interim budget supports the ecosystem of electric vehicles and the necessity of the development of a greener, more sustainable automotive industry.

As Nirmal K. Minda, Chairman & Managing Director, Uno Minda, and former ACMA President puts it, “The focus on promoting entrepreneurial opportunities for numerous vendors in the supply and installation of EV charging infrastructure is a pivotal step towards building a resilient ecosystem. ”