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With soaring fuel prices, more people are likely to be willing to e-mobility. However, the high prices of electric vehicle components hold the budding industry down. The auto industry wishes to develop a robust research and development facilities in the country and wants the government to support it– which is its most prominent Budget 2018 expectation. Society of Indian Automobile Manufacturers (SIAM) expects that the government must restore incentives on research and development in form of weighted tax deduction. The industry also expects that incentives must be given to buyers, including income tax rebates. It also wants policies to make EVs more attractive to buyers.

The Union government had reduced the incentives in form of weighted tax deducted from 200 to 150 percent when it implemented Budget last year. Now, they demand that the incentives must be restored to its previous value.

SIAM deputy director general Sugato Sen said that the government had cut down the incentives, saying the corporate tax will be brought down to 25 percent from 30 percent. Since the industry is investing heavily in research and development, it demands that incentives must be restored.

He further said that e-mobility must be given preferential treatment. The industry has identified a few components that should be levied lower import duty. “We have identified a few components specific to electric vehicles for import with lower duty. We have also said that if the government is considering a higher tax rate for completely knocked down (CKD) units as relates to electric vehicles, it should be defined properly…so nobody gets on the wrong foot after importing”.

The automaker that can capture this kind of icon status in the electric-vehicle space will be in a different gear for years. At the moment, Tesla Inc. appears to have that advantage, although there’s probably room for another paragon vehicle or two—a more affordable SUV, for instance, or an electric pickup truck.

The Society of Manufacturers’ of Electric Vehicles demanded that the government must introduce incentives for prospective buyers of EVs, including tax rebates. The cost of EVs must be brought down by local manufacturing of components of EVs. Encouragements must be given to manufacturers to produce components in the country to bring down the high cost of ownership of electric vehicles.

The scheme, details of which may be part of the Union Budget this year, is also expected to improve India’s standing in global climate change discussions. The details reviewed by Mint suggest that the finance ministry has asked the department of heavy industries to devise ways to track incentives and subsidies online.

“For a country like India which depends on imported oil, electric vehicles make eminent sense from the energy security point of view. It also has huge climate change benefits if we dovetail it with renewable energy. Electric vehicles are the future and government should invest in this technology for energy security and climate benefits," said Chandra Bhushan, deputy director general, Centre for Science and Environment.