Business

Impact of Budget 2019 on the Indian Electric Vehicle Industry

On July 5, finance minister, Nirmala Sitharaman announced the Union Budget 2019, that discusses the reduction in GST on electric vehicles.  She stated that “With an aim to become a global hub for electric vehicle manufacturing, the government has already moved GST council to lower the GST rate on electric vehicles (EV) from 12% to 5%.” The government’s next endeavour is to transform India into the next global EV hub. With the effort to promote the production of EV’s the government is making an additional income tax relief of 1.5 lakh rupees on interest paid on the loans by the consumers to purchase EVs. The government is determined to combat the climate change through the National Electric Mobility Mission Plan (NEMMP) 2020, under which the scheme of Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME India) was launched, that intends to foster and adapt infrastructure for electronic and hybrid technology.

India’s largest online transportation network company, Ola electric received a funding of US$250 million and has attained a valuation of US$1 billion. In a span of 8 years, the business is thriving and is in pursuit to introduce more eco-friendly means of transportation in India. Ola has raised $3.5 billion and Didi Chuxing, Sequoia India and DST Global are few it’s investors. The company is now on the forefront to seize the opportunities from the policies laid by the government. By 2021, Ola electric aims to launch 1 million EV’s.

“At Ola Electric, our mission is to enable sustainable mobility for everyone. India can leapfrog problems of pollution and energy security by moving to electric mobility, create millions of new jobs and economic opportunity, and lead the world,” Ola CEO and co-founder Bhavish Aggarwal asserted.

A few issues with EV’s could be resolved by bringing down custom duty on lithium-ion cells would decrease the cost of batteries and will enable the local battery manufacturers to expand the business. And since charging batteries is a key issue in EV’s, the company is aimed towards improving and meeting these challenges, by providing easily accessible and dependable services at the petrol pump or service centres solely for electronic motors.  Ola is setting up a great example for emerging startups. India is steadily moving towards encouraging, transforming electronic mobility and combating climate change through these remarkable efforts.

India’s climate is at a crucial point that has compelled the government, the people and the corporations to act on behalf of the society as a whole. Moreover, there are huge profits in the act that can save societies from the wrath of climate change. The introduction of electric vehicles will significantly reduce the urban vehicular pollution that often chokes up the cities especially in the Gangetic plains of India.

-Evelyn Pamela Tete

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