Budget 2024: Boon Or Bane For Electric Car Buyers? Prices Set To Drop Soon!

Budget 2024: The government on Tuesday proposed fully exempting customs duties on 25 critical minerals, including lithium, copper, cobalt, and rare earth elements.

Budget 2024 - Electric Cars: The government on Tuesday proposed fully exempting customs duties on 25 critical minerals, including lithium, copper, cobalt, and rare earth elements. This will likely result in reducing the prices of lithium-ion batteries and, consequently, cutting the prices of electric vehicles since EVs use lithium-ion batteries, which constitute a major part of the overall vehicle cost.

While presenting the Union Budget 2024 in parliament, Finance Minister Nirmala Sitharaman said, "Minerals such as lithium, copper, cobalt, and rare earth elements are critical for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics. I propose to fully exempt customs duties on 25 critical minerals and reduce BCD on two of them."

Commenting on the Union Budget 2024, Rajeev Chaba, CEO Emeritus, JSW MG Motor India, said, "Finance Minister’s decision to waive import duties on critical minerals, including lithium, copper, and cobalt, is a step in the right direction for the electric vehicle industry. This move will reduce battery manufacturing costs, making EVs more affordable and attractive."

"It will also enhance lithium-ion battery production in India, supporting localisation efforts and advancing the sector's growth. Additionally, the government's initiatives for job creation and investment in industrial training centres will ensure a skilled workforce in the automotive sector," he added.

However, no announcements were made on FAME III, which was something the automobile sector was anticipating from the budget 2024 to boost electric vehicle adoption and manufacturing in the country. But, the good news is the government is working on the third phase of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme and is likely to be implemented in the near future. 

HD Kumaraswamy, Minister for Heavy Industries and Steel, recently told the news agency PTI that the government is working on the FAME III scheme. However, it will not be featured in the upcoming Union Budget. "In the future, some months or some future days it is going to be implemented," he said.