Sustainability Karma

India's first and only show on sustainability on All India Radio

Union Budget 2025-26 Expectations

Innovative financing models can bridge this gap, making EVs affordable for a larger segment of the population: Abhinav Kalia of ARC Electric

Budget 2025: One of the barriers to EV adoption remains the high upfront cost of electric vehicles.

The excitement surrounding Budget 2025 is tangible, particularly for the electric vehicle (EV) industry, which stands at the crossroads of innovation, sustainability, and economic growth. With India’s ambitious goal of achieving net-zero emissions by 2070 and the government’s push for cleaner mobility solutions, this year’s budget offers an opportunity to accelerate the EV revolution. A well-structured budget can address existing challenges, foster innovation, and position India as a global leader in sustainable transportation.

Encouraging Manufacturing through Fiscal Incentives

The cornerstone of a robust EV ecosystem lies in localized manufacturing. India’s dependence on imports for critical EV components like lithium-ion batteries poses a significant challenge. Budget 2025 can address this by expanding the Production Linked Incentive (PLI) schemes to encompass a broader range of EV components, including advanced batteries, electric drivetrains, and semiconductor technologies. Additionally, tax breaks and reduced GST rates for EV manufacturers will not only lower production costs but also make electric mobility more accessible to the masses.

Building Infrastructure for a Sustainable Future

Charging infrastructure remains one of the most pressing concerns for EV adoption in India. Although initiatives like the FAME II scheme have been instrumental in establishing charging stations, a significant gap persists, especially in rural and semi-urban areas. The upcoming budget could allocate substantial funds for expanding charging infrastructure, emphasising interoperability and standardisation. Public-private partnerships should be encouraged to ensure widespread deployment while keeping costs manageable for end-users.

Promoting Battery Recycling and Innovation

Battery waste management is an emerging concern as the EV industry scales. Budget 2025 can introduce policies to incentivise battery recycling and promote research into alternative battery technologies, such as sodium-ion and solid-state batteries. These measures will not only address environmental concerns but also reduce dependence on costly lithium imports. Establishing government-backed recycling hubs and mandating Extended Producer Responsibility (EPR) for EV manufacturers can ensure a sustainable approach to battery lifecycle management.

Enhancing Financing Models for Consumers

One of the barriers to EV adoption remains the high upfront cost of electric vehicles. Innovative financing models can bridge this gap, making EVs affordable for a larger segment of the population. Enough Budgets could extend subsidies for EV purchases under the PM  E-Drive scheme and introduce tax incentives for financial institutions providing green loans. Additionally, zero-interest loan schemes for EV buyers, especially in the commercial and two-wheeler segments, can significantly boost adoption rates.

Fostering Research and Skill Development

The EV industry is dynamic, requiring continuous research and a skilled workforce. Budget 2025 can allocate funds to establish Centers of Excellence (CoEs) dedicated to EV research and development in collaboration with leading academic institutions. Additionally, skill development programs focused on EV assembly, maintenance, and battery technology should be expanded to create a workforce ready to support the industry’s growth.

Setting the Stage for a Green Future

Budget 2025 is more than a fiscal document—it’s an opportunity to shape the future of India’s mobility landscape. By focusing on manufacturing, infrastructure, sustainability, and affordability, the government can create a robust framework for EV adoption. This not only aligns with India’s climate goals but also enhances energy security, reduces pollution, and positions the country as a global hub for electric mobility innovation. As the industry waits with bated breath, one thing is certain—India’s EV journey hinges on the policies and vision embedded in this year’s budget.