Budget 2025 Expectations Live: Prioritize domestic production in electric vehicle sector

“As we approach the 2025 budget, prioritizing domestic production in the electric vehicle (EV) sector—particularly in the manufacturing of Cathode Active Materials (CAM) for lithium-ion cells—is crucial. At Vidyuta, we are committed to sustainability by producing high-quality CAM using recycled materials. This process reduces reliance on virgin mining by up to 30% and cuts greenhouse gas emissions by 50%, contributing significantly to a circular economy.

With EV adoption in India growing by 150% between 2021 and 2024, this budget marks a pivotal moment to accelerate the green transition. However, India’s heavy reliance on Chinese imports for critical EV components poses significant risks, especially amid ongoing geopolitical tensions. The urgency has further intensified with China now proposing restrictions on licensing its technology for LFP (Lithium Iron Phosphate) and LMFP (Lithium Manganese Iron Phosphate) battery chemistries, potentially creating new barriers for global manufacturers and deepening supply chain vulnerabilities.

Strengthening domestic manufacturing capabilities is no longer optional but a necessity. The Atmanirbhar Bharat initiative provides a vital framework for self-reliance, and proactive measures must be taken to reduce our dependence on imports.

One key policy change we recommend is aligning the GST rate for lithium-ion batteries and EV charging infrastructure with the 5% GST on electric vehicles. Currently, EVs attract 5% GST, while batteries and charging services are taxed at 18%. This disparity not only increases costs but also slows consumer adoption. For instance, reducing GST on batteries alone could make EVs 10-15% more affordable for consumers, driving faster adoption and boosting the EV market.

To further support startups pioneering innovations in critical EV manufacturing, we urge the government to enhance existing initiatives like the Production Linked Incentive (PLI) scheme and the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme. Adjusting eligibility criteria within the PLI scheme to accommodate smaller enterprises can foster broader participation, while extending the duration and increasing funding of the FAME scheme can provide sustained support for startups, encouraging long-term investments. Implementing these enhancements can create a more supportive ecosystem for startups, reduce supply chain risks, generate employment opportunities, and ensure national energy security.

By fostering advancements in technology, reducing dependence on imports, and making green mobility more affordable, we can position India as a global leader in the EV landscape. This budget is an opportunity to not only safeguard our energy future but also empower millions of consumers to embrace sustainable transportation.” says Ankit Sharma, CEO & Co-Founder, Vidyuta.