On Tuesday, Finance Minister Nirmala Sitharaman introduced the budget for the fiscal year 2022-23. The last one year has been great for the EV ecosystem and the sector had a lot of expectations from the budget. During the budget session, the government made it clear that they will continue to focus on promoting cleaner mobility.

The Finance Minister announced that they are mulling to announce a battery swapping policy in India. Further, to improve the efficiency of EV business government will also be formulate interoperability standard. For those unaware with the concept of battery swapping, this will allow users of EV to visit a battery-swapping station and replace a depleted battery with a fully charged one and thus saving them the time to wait their car battery is getting charged.

Most industry experts have welcomed this move and believe that this will pave way for further growth.

Lauding the move, Nitin Gupta, Co-Founder and CEO Attero Recycling said, “In the Union Budget tabled today, the Hon’ble Finance Minister has announced a slew of measures to further bolster the adoption of EVs in India. Taking into cognisance the constraint of space in urban areas for setting up charging stations, a battery swapping policy has been proposed. It has also been announced that the interoperability standards will be formalised soon. These steps will not just have a positive impact on the existing players but will also encourage new players that are planning to foray into the segment. We also welcome government’s decision to issue sovereign Green Bonds in public sector projects to reduce carbon footprint in the economy. The budget also lays emphasis on transitioning towards circular economy and touched upon Li-ion battery recycling and Electronic waste management. As the industry grows, we are aligned to play our part in the EV ecosystem by recycling end of life Li-ion batteries and helping India be Atmanirbhar in key elements such as Lithium, cobalt and nickel.

It is believed that the slew of measures announced today will not just give impetus to the industry but also help India progress in becoming a clean energy country.

Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV) said, “We welcome the measures announced by the Finance Minister, today. The budget for 2022–23 gives a huge impetus to the electric vehicle (EV) industry. Introducing the battery swapping policy and recognizing battery and energy as a service will help to develop charging infrastructure and increase the use of EVs in public transportation. It would motivate businesses engaged in delivery and car aggregation businesses to incorporate EVs into their fleet.”

Naveen Munjal, (MD, Hero Electric, had a similar observation as he said, “The last year has seen the EV industry witness tremendous growth and the government has been privy to the fact that the way forward in the mobility sector is to shift to EVs. We thus welcome the move by Hon’ble Finance Minister for announcing the commencement of battery swapping and battery standardization process. This move will open up avenues for further growth and development of the EV and energy sector in the country.

While there are many positives in the Union Budget 2022 for the EV industry, it fails to provide any immediate relief to the Indian auto industry. The Federation of Automobile Dealers Associations (FADA) had urged the government to reduce GST for two-wheelers. The industry body believes that it will help in rejuvenating the demand in the segment. However, this item from the wish list has not been included in the budget presentation.