Attractive financing options would drive the sales of the EV and enable India to achieve its 2030 target

Electric Vehicles (EVs) are one of the hottest topics and the reason they have garnered so much attention is that they impact the performance of several other industries. Government policy frameworks and other directives are crucial in deciding the fate of the industry. As the dates of the Union Budget 2023 draw closer, all eyes are set on the provisions laid out for the EV industry and how the industry will be impacted.

Here are some expectations that the members of the EV ecosystem have from Budget 2023:

Limited Financing Option

One of the primary challenges that the EV industry is facing in its growth is financing. For vehicle users, who wish to switch to an EV, this is a major hindrance, as there are very limited financing options available. Most of the leading banks and financial institutions do not provide financing or loan for electric vehicles and it is because of various reasons. While on the other hand, the ones who do, charge a considerably higher rate of interest. This increases the cost of ownership of the EV and discourages more users from switching from an Internal Combustion Engine (ICE) vehicle. The biggest expectation from the Union Budget is the provision for easy finance options. This would require special benefits extended to financial institutions and banks. Attractive financing options would drive the sales of the EV and enable India to achieve its 2030 target.

Lack of Charging Infrastructure

Despite a major push extended by the Government towards the EV segment, people at large are still not comfortable with the idea of switching from an ICE to an EV. The major reason behind this is the limited charging infrastructure and network of charging stations. There is a need to give a push to the development of a widespread network of fast charging stations for electric vehicles across cities and smaller towns. The network must also cover all major highways and expressways so that people are motivated to travel across cities by an EV. According to the prevailing trend, most EV users are restricted to commuting within the cities and metro areas, because of the fear of running out of charge on a long route. Members of the EV industry are very keen to hear any positive guidelines in this regard in the Union Budget, 2023. Any such declaration would give a much-needed push to the EV industry and its associated industries.

Lack of EV Supply Chain

Another factor hampering the growth of the EV industry is the lack of a supply chain to push forward the manufacturing and sales process. Manufacturers of electric vehicles and equipment such as batteries and microchips have to rely on the older means of the supply chain, shared by other industries. There is a need to develop and dedicate a separate supply chain infrastructure with separate policies in order to boost the industry. The EV industry stakeholders are expecting big announcements in this regard in the budget.

Upskilling Human Resource

India has no dearth of skillful labour force. When it comes to the EV industry, the only need is to upskill the available talent and work on the knowledge enhancement function. One of the best ways to do this is by promoting the idea of establishing a Centre of Excellence (CoEs) in major educational institutes. The CoEs can be established as a collaborative entity involving the educational institute and leading industrial houses. This would not only prepare the students to fill the available jobs in the industry, but would also allow the industrial enterprise to hire talent that hones the skills required.

With the international consciousness bent towards adopting EVs on a large scale, India needs to take some drastic steps to be in the race. India is a very crucial market and it can also be developed as an EV manufacturing hub, serving other countries in the region. The Government can initiate a master plan in this direction, starting with this Budget. Manufacturers, importers, and part suppliers of the EV industry have high hopes for this year’s budget.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house