The Union Budget 2025 brings major incentives for the electric vehicle (EV) industry, especially for battery and component manufacturing. The government aims to make India a global hub for EV production by offering customs duty exemptions on 35 capital goods, supporting local manufacturing of EV motors and controllers, and integrating EVs into the Clean Tech Manufacturing Program.
Key Highlights
1. Customs Duty Exemption on 35 Capital Goods
To reduce costs and boost production, the budget exempts customs duty on 35 capital goods used in EV battery manufacturing. This will lower the cost of lithium-ion batteries, making EVs more affordable.
2. Support for Domestic Manufacturing
The government will provide support to MSMEs involved in the production of EV motors, controllers, and other essential components. This move will strengthen the EV supply chain and reduce dependence on imports.
3. Clean Tech Manufacturing Program
EV manufacturing will be integrated with the Clean Tech initiative, which focuses on:
- Solar PV cells
- EV batteries
- High-efficiency motors and controllers
4. Charging Infrastructure & Battery Recycling
- The budget encourages investment in charging stations to expand EV accessibility.
- Focus on battery recycling will promote sustainability and reduce e-waste.
Impact on EV Prices & Segment-Wise Cost Reduction
The customs duty exemption and incentives will lower the cost of EV batteries, reducing the overall price of electric vehicles. Below is an estimated impact on different EV segments:
| Segment | Current Price (Approx.) | Expected Price After Budget 2025 |
|---|---|---|
| Entry-Level EVs | ₹8 – ₹12 lakh | ₹7.5 – ₹11.5 lakh |
| Mid-Range EVs | ₹15 – ₹20 lakh | ₹14 – ₹19 lakh |
| Premium EVs | ₹25 – ₹50 lakh | ₹23 – ₹47 lakh |
| Electric Two-Wheelers | ₹80,000 – ₹1.5 lakh | ₹75,000 – ₹1.4 lakh |
EV Features & Specifications Covered Under Budget 2025
| Feature | Budget 2025 Impact |
|---|---|
| Battery Cost | Reduction due to duty exemption |
| Charging Infrastructure | Expansion through government investment |
| Battery Recycling | Focus on sustainability & eco-friendly disposal |
| Motor & Controller Manufacturing | Local production support for MSMEs |
| Credit Access for MSMEs | Easier loans for EV component manufacturers |
15 FAQs About Budget 2025 & EV Battery Incentives
1. How does Budget 2025 benefit EV buyers?
The budget lowers the cost of lithium-ion batteries, making EVs more affordable.
2. What is the customs duty exemption for EV batteries?
35 capital goods used in battery production are exempt from customs duty.
3. Will EV prices drop due to Budget 2025?
Yes, battery costs will reduce, lowering overall EV prices.
4. How does Budget 2025 support MSMEs in the EV sector?
MSMEs get support for manufacturing motors, controllers, and other EV components.
5. What is the Clean Tech Manufacturing Program?
A government initiative to boost production of solar PV cells, EV batteries, and motors.
6. How will battery recycling be promoted?
The government encourages eco-friendly battery disposal and recycling infrastructure.
7. Is there any support for EV charging stations?
Yes, the budget includes incentives for setting up charging infrastructure.
8. How will EV motors and controllers benefit from this budget?
Local manufacturing will be promoted, reducing dependency on imports.
9. Will electric two-wheeler prices drop?
Yes, due to lower battery costs and increased local production.
10. What are the expected price reductions for EVs?
Entry-level EVs may become ₹50,000 – ₹1 lakh cheaper, depending on the model.
11. Will this budget make India an EV manufacturing hub?
Yes, by incentivizing local production and reducing imports.
12. What other industries benefit from Clean Tech incentives?
Solar PV cell production and high-efficiency motor manufacturing.
13. Is there any research funding for EV battery development?
Yes, the government is supporting battery R&D for advanced technology.
14. How does this budget align with India’s green energy goals?
It promotes clean transportation and sustainability in EV production.
15. What is the overall impact of Budget 2025 on the automobile industry?
It accelerates EV adoption, lowers prices, and strengthens local manufacturing.
