Automotive Industry Welcomes the Progressive Union Budget 2022

#Budget2022 #UnionBudget #Budget

Source: Team Pro MFG

This year’s budget announcements have created a new wave of optimism for the Indian automotive sector. But a lot will depend on the actual implementation for the EV Sector.

February 2022 : While welcoming the strong push to infrastructural development, the automotive industry believes that the budget offers continuity and also additional opportunities to drive multi-year growth. Unsoo Kim, MD, Hyundai Motors India Ltd. has said that the Government's strong approach towards accelerating infrastructure development, sustainability along with digitalisation in every-sphere of business will give strong impetus to the overall economy while empowering consumerism in India. “The vision for clean mobility creating an electric vehicle ecosystem is a positive indicator for the auto Industry and for its large supply chain. The forward-looking budget will lay modular economic structure for every section of business and society in India.” Mr. Kim said.

The Toyota Kirloskar Motors spokesperson said that the forward looking budget has clearly outlined Government’s long term objectives of focusing on growth, inclusiveness, promoting technology enabled development, productivity enhancement, energy transition & climate action. “With the Government’s push for green energy and clean mobility systems, India is on the path of limitless possibilities. As a sustainability-committed organisation, we believe that the Government’s push for clean mobility initiatives and blended fuels will play a significant role in achieving decarbonisation goals and reduce dependence on fossil fuels. One of the biggest challenges for the EV ecosystem has been battery charging stations. The proposed battery-swapping policy will help create standards of interoperability thereby making EVs more accessible and affordable.” the Toyota Kirloskar Motors spokesperson added.

Speaking in the context of the automotive sector, Venu Srinivasan, Chairman, TVS Motor Company has welcomed the ‘PM Gati Shakti Master Plan’ focusing on building world-class infrastructure and improved connectivity for commuters. “The strong push towards augmenting agricultural productivity should help enable buoyant rural demand. In the electric mobility space, we strongly support the measures undertaken by the Government to promote clean and green mobility, mainly introducing the battery-swapping policy will be instrumental in supporting an efficient EV ecosystem. There is an impactful thrust towards renewable energy incentives with an increased focus on reducing infrastructural waste for a greener tomorrow,” Mr. Srinivasan said.

PB Balaji, Group CFO, Tata Motors, has described the Budget as an ‘articulation of purposeful intent enabled by a clear action plan’. “For the Indian automobile sector, which is a significant contributor to the nation’s GDP, the budget offers continuity and also additional opportunities to drive multi-year growth. Specifically, the robust increase in capex by 35.4% to Rs. 7.5 lakh crore and a comprehensive investment plan for infrastructure is a significant growth booster. Additionally, the launch of the well-conceived PM Gati Shakti program for multi modal transport including 100 cargo terminals and investments in 25000 Kms of highways, apart from investments in ports and metros is an excellent development that will help create a world class transport infrastructure in the country. This will reduce logistics costs and transit times, increase employment and make us globally competitive with avenues for better and efficient mobility solutions. Additionally, plans to create EV charging infrastructure including national policy for battery swapping which when combined with the already announced Automotive PLI scheme, furthers the agenda for green mobility. Tata Motors welcomes this balanced, thought through budget.” Mr. Balaji mentioned.

Dheeraj Hinduja, Executive Chairman, Ashok Leyland Limited said that investment led growth strategy and the sizable capital investment for sustained and speedy economic revival are reflected in the sharp increase in capital expenditure for FY23. “The special focus on education, digital and clean mobility is laudable. The Battery Swapping policy and special EV mobility zones will help in the smooth transition to electric vehicles,” Mr. Hinduja stated.

Push for Electric Vehicles

The Union Budget 2022 has put forth relevant policies for the faster adoption of Electric vehicles in India. Sumit Chhazed, Co-founder, OTO Capital, remarked that the government’s announcement to bring Battery Swapping Policy would meet the issue of limited charging stations and hence increase EV adoption by the masses. “The encouragement of private sectors to bring up new and innovative business models to enhance the efficiency in the EV ecosystem is the right start as it would lead to much-needed disruption in this space by start-ups. Allocation of funds to reduce carbon intensity in vehicles is in a way directed towards the faster adoption of EVs,” said Mr. Chhazed.

Akash Gupta, Co-founder & CEO, Zypp Electric said that the formulation of battery swapping standards and interoperability is a much-needed step in the right direction. “The focus and thought towards the EV sector by the honorable finance minister reflects the government's poise towards accelerating EV adoption. This will also help us achieve our vision of expanding our battery-swapping network across 100 cities in the next three years I would have loved if GST in battery and spare parts had also been reduced to 5% like it's there for E-vehicles purchases; this would also help the entire electric vehicle ecosystem,” stated Mr. Gupta.

Vivekananda Hallekere, CEO & Co-Founder, Bounce, welcomed the FM’s progressive vision to facilitate faster adoption of electric vehicles in the country. “With the Budget 2022 -2023 announcement on bringing out a robust battery swapping policy, this is a vindication of the path that we have pioneered for Bounce. Government and policymakers have recognised battery swapping as the most effective solution to accelerate EV adoption in India by addressing range anxiety and hesitancy in adoption as well as considering the pragmatic aspects of setting up charging infrastructure – for instance, space constraints in urban areas for dedicated charging stations. We believe this move can enable affordable and clean mobility at scale,” stated Mr. Hallekere.

Amit Kumar, ED & CEO, Benling India, remarked that the measures announced in the budget shall go a long way in amplifying and buttressing the market for these products. “At present many customers have a fair amount of skepticism about the use and operation of EVs, especially with respect to the battery issues and mileage concerns. The budget attempts to effectively allay these fears by bringing in welcome provisions for battery swaps and charging stations infrastructure. The introduction of the inter-operability standards here is a long-awaited step and we are confident that this would further boost the industry and help put India’s auto industry on a positive and, needless to say, green trajectory. In addition to this, the overall EV eco-system is sure to get a shot in the arm through the added focus on clean transport technology and the development of mobility zones,” said Mr. Kumar.

Yatin Gupte, Chairman & Managing Director, Wardwizard Innovations & Mobility Ltd, appreciated the budget due to its focus on sustainability and transition towards cleaner and greener mobility, which is the future of transportation. “The proposed Battery Swapping Policy will provide a mammoth push to the EV adaptability campaign across the nation. We are eagerly looking forward to the Government’s ambitious vision towards upgrading the EV infrastructure ecosystem and also, easing the supply chain through a multi modal logistics park which will augment the movement of goods and services across the region. PM Gati Shakti will act as a catalyst for the industry, 60 lac new jobs will be created which will benefit the automobile industry,” added Mr. Gupte.

Nagesh Basavanhalli, Group CEO & MD, Greaves Cotton Limited, said that the battery swapping policy will boost the adoption of EV. Further, the government’s move to encourage the private sector’s involvement to create sustainable and innovative business models for battery and energy as a service, too, will be a game-changer for the growth of the entire EV ecosystem of the country,” Mr. Basavanhalli added.

Sambit Chakraborty, Board of Adviser, Indigrid Technology, has suggested that the policies should take a holistic approach to ensure that there is a proper and adequate supply network of swappable packs and swap stations so that it works as if someone is fuelling their vehicle and is able to “swap” in 2-3 minutes. “Ground charging does not really work except at home (not for commercial purposes) because of the load it will exert on the grid and the time it takes. Convenience especially for the last mile operators, gig economy players and home tests/collections is key. Second, there is a proliferation of low quality Chinese players who are “cheap”. There are substantial safety and dependency issues being built into the system. If the policy can build in a structure to raise the safety and “atmanirbhar” aspects and the made in India aspects - that will be a boon for India in the long run. There are many Indian manufacturers of safe batteries and swap stations who would then not have to choose to lower quality and safety standards,” remarked Mr. Chakraborty.

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