Automotive sector

Budget 2022: Expectations of the automotive sector and the transition to electric mobility

As India nears the end of another fiscal year amid the pandemic, expectations are rising around the path to economic recovery. The industrial sectors are now eagerly awaiting the announcement of the new budget, as multiple reforms are needed to put the economy back on the path to growth, provided that we do not have new variants and new blockages. The automotive sector has also suffered from the pandemic, but now sees long-term growth on the horizon.
Interestingly, the sector also appears to be on the cusp of an impending electric revolution. However, the transition from fossil fuels to electric mobility is not easy and will require strong government focus. The industry has been demanding rebates and stimulus to encourage EV adoption and this time around there are also pre-budget expectations for policies that will hopefully put the sector on a growth trajectory to long term. So far, the government has expressed its intention to support the move to electrification and has also announced some incentives. However, large-scale change requires policies with broader coverage and a particular focus on the development of critical technologies in the country. That said, there are also other pressing requirements on the tax front, infrastructure, and more that will help the industry continue its long-term growth.
What carmakers think and want Carmakers in different categories shared their expectations for the upcoming budget, which gave us insight into the main requirements of the automotive sector.
On the electric mobility side, Tarun Mehta, co-founder and CEO of Ather Energy, said: “The demand for electric vehicles continues to increase as consumers take advantage of the benefits offered by the FAME II subsidy and rebates. tax. To sustain consumer demand and accelerate EV adoption, we expect the FAME II grant to continue well beyond 2023. The EV industry needs such early incentives to accelerate manufacturing and adoption. consumers to ensure stability in the years to come. we are seeing new players emerge offering reliable and valuable products over gasoline-powered vehicles. Another key aspect to accelerating the adoption of electric vehicles is the development of charging infrastructure to build consumer confidence. It is imperative to ensure mandatory implementation of electric vehicle charging infrastructure in all existing and future housing projects and commercial establishments. In addition, incentivizing the installation of electric vehicle charging stations in existing residential areas, housing complexes and commercial establishments will greatly contribute to the establishment of infrastructure. ”
Adding to the update on FAME subsidies, Suhas Rajkumar, CEO and Founder of Simple Energy, said: “The government has tried to support the electric vehicle industry through FAME and other programs to help the sector produce better products at affordable prices, which in turn encourages people to switch to electric vehicles.Consumer interest in electric electric vehicles is growing; however, expectations regarding performance remain high.As consumers are concerned about a general lack of charging infrastructure, the government must propel the sector by providing the same In the budget, we expect more relief for younger and more ambitious players in the electric vehicle sector like us, because we have been affected by rising component prices and shortages of semiconductors.The budget should encourage stakeholder collaboration. rs of electric vehicles and divert more funds to the government’s clean fuels vision. To facilitate the mass adoption of electric vehicles in India, we need a seamless EV infrastructure that is much more capable and connected, sustainable and has a smarter mobility landscape.”
Expressing his thoughts, Martin Schwenk, Managing Director and CEO of Mercedes-Benz India, said: “The Union budget should aim for long-term holistic growth for the automotive industry by prioritizing job creation. , infrastructural development, introduction of latest technologies and increased carbonization efforts. With stable policies and a clear roadmap for the sector, accelerated growth can be achieved by rapidly transitioning the industry into the emerging era of electric mobility, putting the Indian automotive industry on the global map. An overhaul of the existing tax structure with a clear focus on changes in direct taxation to boost consumption, promote exports, create direct jobs and promote digitalization is strongly desired. Continued government spending on infrastructure projects would further stimulate demand for passenger and commercial vehicles.
A spokesman for Toyota Kirloskar Motor, said: “We believe that by emphasizing the Production Linked Incentive Program (PLI) for several identified key sectors, the government has sought to transform the economy India by attracting huge investments in advanced and future technologies, and for areas where India currently relies heavily on imports.This initiative promises to not only make us self-sufficient but also globally competitive. government allocation will be spread over the next five years, these programs will provide the desired boost without the immediate and sudden burden The automotive industry is one of the sectors that will benefit directly as well as through the electronics and cells LIPs of advanced chemistry (ACC) These measures will contribute to create a dynamic and competitive local manufacturing ecosystem for advanced and green technologies at small scales. industries, thus making India a strong manufacturing hub. The benefits will also ripple through the entire supply chain. also giving a boost to MSMEs. »
Dr. Raghupati Singhania, President and Managing Director of JK Tire & Industries, said: “The overall budget expectation for the coming financial year is fundamental growth and ease of doing business through removing the bottlenecks of strangulation in all aspects, thus freeing the economy. India’s growth story is about to reach a critical inflection point. The automotive sector, in the recent past, has been buffeted by strong headwinds. A simplified tax structure, new incentives for the automotive sector and automotive components are the need of the hour Sustainable mobility must be facilitated. A vibrant automotive industry not only drives overall economic growth, but also generates significant upstream and downstream jobs.
Summary
Clearly, the industry is looking forward to some key announcements regarding electric mobility and any positive announcements on this front will go a long way to smooth the transition. In addition, the automotive sector is also expecting improvements on the tax front as it continues to be one of the most heavily taxed industries resulting in a higher purchase cost for the end consumer. These and other areas, including infrastructure work, clearer policy development and a vision for long-term, sustainable growth, are high on the list of expectations for the automotive sector.