NEW DELHI: Finance Minister Nirmala Sitharaman said on Tuesday that the government will come out with a battery swapping policy to boost the ecosystem for electric vehicles (EVs). However, the budget had no mention to ease finance availability when it comes to purchasing EVs, which also was the industry's biggest demand from this budget.
"The policy is being brought out considering the constraints of space in urban areas for setting up charging stations," Sitharaman said during her Budget 2022-23 speech. The FM also said that the government will formulate interoperability standards.
From the past few weeks EV players have been saying that the government could look at putting EVs in the priority lending sector to help citizens afford EVs at lower interest rates. In a recently released report, government think tank Niti Aayog had said banks and non-banking financial companies (NBFCs) can achieve an EV financing market size of Rs 40,000 cr ($5 bn) by 2025 and Rs 3.7 lakh cr ($50 bn) by 2030.
Rajiv K Vij, Founder of Plug Mobility, said that there are some good announcements in the budget to promote EV's through promoting charging infra and standardising the battery norms for swapping and interoperability.
"However, the budget has missed a major challenge in EV adoption — availability of financing for fleets and credit guarantee by the government is desperately required by fleet owners who have suffered hugely during the pandemic. The commercial car industry is ready to transition to EV but without the availability of easy finance at low cost, this will be delayed further," said Viz.
Rajeev Singh Partner & Automotive Leader, Deloitte India, said that the budget also missed to address some of the burning issues the sector is facing – such as no direct incentives to drive consumption / demand, lack of charging infrastructure for EV’s & rising commodity prices.
The budget barely had any mention of traditional (petrol/diesel-run) automotive industry where demand, particularly in the two-wheeler segment, is at an all time low. The industry was hoping the government to bring down GST rate on two-wheelers from 28% to 18% to boost demand.
Meanwhile, Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV), said that introducing the battery swapping policy will motivate businesses engaged in delivery and ride aggregation businesses to incorporate EVs into their fleet. Samrath Kochar, CEO & Founder of Trontek, manufacturer of battery, said that the battery swapping policy with interoperability will help allay the range anxiety and bring the EVs at par with ICE vehicles in terms of time taken for replenishment of fuel."