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 of steps to ease the availability of finance when it comes to purchasing EVs, which was the industry's biggest demand.
"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.
For the past few weeks, EV players have been unanimously saying that the government could look at putting EVs in the priority lending sector to help citizens afford them at lower interest rates. In a recently released report, government think tank Niti Aayog, while proposing that the government include EVs in the Reserve Bank of India’s priority-sector lending guidelines, had said banks and non-banking financial companies (NBFCs) in India have the potential to achieve an electric vehicle (EV) financing market size of Rs 40,000 crore (USD 5 billion) by 2025 and Rs 3.7 lakh crore (USD 50 billion) by 2030.
Rajiv K Vij, Founder of Plug Mobility, said that there are some good announcements in the budget to promote EVs through promoting charging infra and standardizing 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 availability of easy finance at low cost, this will be delayed further," said Viz.
Rajeev Singh, Partner & Automotive Leader, Deloitte India, said the budget also missed addressing some of the burning issues the sector is facing – such as no direct incentives to drive consumption and demand, lack of charging infrastructure for EVs & 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, India’s largest Li-ion battery manufacturer, said that the battery swapping policy with interoperability will boost adoption of EVs as it will help allay the range anxiety and bring EVs on par with ICE vehicles in terms of time taken for replenishment of fuel.