Budget 2025 Expectations: What Auto sector needs?

30 Jan 2025 , 10:34 AM

All eyes are on the upcoming Union Budget 2025-26 to provide some relief, as the automotive industry is facing a slowdown in both commercial and passenger vehicle segments. The industry expectations are mainly towards two things: Policy to boost EV adoption through incentives, and infrastructure and skill development policies that will aid in boosting consumer spending overall.

1. The PM e-Drive initiative provides a subsidy of ₹5000/kWh, up to a maximum of ₹10,000 per unit. The drive is valid until March 31, 2026. This means that electric two-wheelers with high-end batteries can be purchased with a maximum discount of ₹10,000. That is, if the automobile was registered in Fiscal Year 2024-2025. However, many believe that incentives do not justify the boost that the EV sector needs. Hence, manufacturers are hoping for consistency with long-term policy. 
2. The growing taxation concerns on batteries for E4W and charging stations has been duly intimated to the relevant government authorities. The vital need is for 5% GST across EVs, components and charging infrastructure. Though the chances of any reduction in GST rates are very slim.
3. Experts also believe that improved financing options are required, specifically for e-two-wheeler and commercial segments.
4. Standardizing charging methods across products and investing in the construction of charging infrastructure in partnership with petroleum and energy businesses are key initiatives to promote the adoption of electric vehicles, stated experts.

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