Union Budget 2025: A Game-Changer for the EV Industry

The latest Union Budget has introduced significant exemptions for lithium-ion batteries, motors, controllers, and essential materials such as cobalt powder and zinc, marking a pivotal moment for the electric vehicle (EV) industry. This strategic move is expected to make electric vehicles more affordable, thereby accelerating manufacturing and sales across the nation.

With key EV manufacturing hubs established in Hosur, Ranipet, and Chennai, the supply chain is set to receive a substantial boost. This enhancement will not only increase local value addition but also significantly reduce import dependence, according to Vinnie Mehta, director general of the Automotive Component Manufacturers Association of India.

Strengthening the Local Value Chain

EV manufacturers anticipate a more efficient and competitive local value chain ahead. Mahesh Babu, CEO of Switch Mobility, highlighted that the exemption of EV components from the capital goods list will enhance the competitiveness of the EV industry. The announcement of the National Manufacturing Mission, with its focus on clean tech manufacturing and EV components, is expected to further strengthen the local value chain, especially in battery production.

This development means that customers can look forward to cheaper EVs. Raptee, a TN-based EV company that manufactures its own batteries, is optimistic about the reduction in battery costs, which constitute 30% to 40% of an electric vehicle's price, as stated by Dinesh Arjun, co-founder and CEO of Raptee.