Budget 2023: Electric Vehicles to Become Cheaper, Govt Extends Concessional Tax on EV Batteries

Budget 2023: Presenting the Union Budget 2023, Finance Minister announced that the subsidy on Electric Vehicle batteries will be extended for 1 year, hence making EVs cheaper.

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Budget 2023: Presenting the Union Budget 2023, Finance Minister Nirmala Sitharaman announced that the subsidies on Electric Vehicle batteries will be extended for 1 more year, hence making EVs cheaper in India. "I propose to continue the concessional duty on lithium-ion cells for batteries for another year", said FM Nirmala Sitharaman FM Nirmala Sitharaman. In May 2021, govt launched the Production Linked Incentive (PLI) scheme for manufacturing batteries. Govt has also doubled the funds in the FAME scheme.

The PLI scheme was aimed to bring down prices of this core key component of electric vehicles. The Goods and Services Tax (GST) on sale of electric vehicles was reduced from 12% to 5%. 

Budget 2023: Reactions

"The government's dedication to promoting environmental sustainability, as emphasized by Finance Minister Nirmala Sitharaman in the recent Union Budget 2023, is a commendable development," stated Sameer Aggarwal, CEO and Founder of Revfin Services, an electric vehicles financing & digital lending platform. He added, "The emphasis on reducing carbon footprint and generating employment through green growth initiatives displays a deep comprehension of the interdependence of the environment and the economy. We eagerly anticipate contributing to attain a more eco-friendly and economically prosperous future for all."

Kalyan C Korimerla, MD & Co-Promoter, Etrio Automobiles said, “We applaud the budget for making Green Growth one of the top 7 priorities. The Pro-EV budget focuses on much-needed initiatives such as Customs Duty reduction from 21% to 13% on Lithium Batteries and an extension of the subsidies on EV batteries for one more year. These are welcome initiatives as these will help boost the demand. The policy on the replacement of old polluting vehicles should accelerate the transition towards electric vehicles which is in line with the budget’s aim to spur eco-conscious lifestyles. Overall, we are happy with the budget as it is inclusive, and progressive and will encourage investments in the EV sector.”