Interim Budget 2024 Boosts EV Ecosystem, Say Analysts

New Delhi: The recent interim budget for fiscal year 2025 has drawn praise from automotive sector analysts, particularly for its focus on enhancing the electric vehicle (EV) ecosystem in India.

Finance Minister’s Vision:

Finance Minister Nirmala Sitharaman emphasized the government’s commitment to expanding and fortifying the EV ecosystem through support for manufacturing and charging infrastructure. She highlighted the encouragement of greater adoption of electric buses for public transport networks through a payment security mechanism.

Key Budget Allocations:

The budget allocated Rs 2671.33 crore for extending the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME India) scheme for FY25. Additionally, significant increases were seen in the Production Linked Incentive (PLI) schemes for automobiles, auto components, and advanced chemistry cell (ACC) battery storage.

Analysts’ Insights:

Analysts have lauded these measures, foreseeing positive impacts on the automotive industry and EV adoption. Shamsher Dewan from ICRA highlighted the potential support for cash flows and credit metrics for automotive OEMs and ancillaries. CRISIL Ratings Director Gautam Shahi commended the emphasis on payment security mechanisms and charging infrastructure, predicting a doubling in electric bus penetration by FY25.

Industry Reaction:

Anurag Singh of Primus Partners noted the budget’s prioritization of public mobility and the anticipated boost in electric bus adoption with the introduction of payment security mechanisms. Sudarshan Shreenivas from CareEdge Ratings emphasized the budget’s support for the growth of the charging infrastructure and overall EV ecosystem.

Conclusion:

The interim budget for FY25 has been hailed as a significant step towards promoting EV adoption and bolstering the EV ecosystem in India. With increased focus on charging infrastructure and support for electric buses, the automotive sector looks poised for further growth in the realm of sustainable transportation.