NITI AAYOG DRAFT PROPOSES GST CUT ON EV BATTERIES

 

NITI Aayog in draft battery swapping policy proposes GST cut on EV batteries

According to a draught battery swapping policy unveiled on Thursday by government think-tank Niti Aayog, the GST Council may propose reducing the difference in tax rates on lithium-ion batteries and electric vehicle supply equipment (EVSE), which are currently 18% and 5%, respectively.

The draught paper outlines the technical and operational requirements that battery swapping ecosystems must meet in order to build battery-swapping infrastructure that is effective, efficient, dependable, safe, and customer-friendly. According to the policy paper, any individual or business is free to set up a battery switching station in any location as long as the stipulated technical, safety, and performance standards are met.

The policy was initially introduced in this year’s Union Budget by Finance Minister Nirmala Sitharaman. The draught is now available for public review, and Niti Aayog has asked for feedback till June 5. According to the draught paper, the general objective is to catalyse large-scale EV adoption by increasing the efficient use of resources (public finances, land, and raw materials for advanced cell batteries) for the delivery of customer-centric services.

“The vehicle segments targeted for battery swapping include e-2Ws and e-3Ws, which are strongly concentrated in metropolitan areas.” As a result, the deployment of battery switching stations will be gradual. Under the first phase, all metropolitan cities with populations greater than 4 million (as of Census 2011) will be prioritised for the establishment of battery swapping networks. Given the importance of the 2W and 3W vehicle segments in emerging cities, the draught policy states that “all key cities such as state capitals, UT headquarters, and cities with populations larger than 5 lakh (as per Census 2011) shall be covered within the second phase.”

Battery switching is an alternative to automobiles being sold with fixed batteries, allowing consumers to swap out exhausted batteries for charged ones. Because vehicles can be sold without a battery – the owner can subscribe to a battery service – the initial purchase cost of the vehicle is reduced.

The introduction of battery swapping seeks to stimulate demand for electric two-wheelers and three-wheelers and accomplish the government’s target of 80 percent market penetration for this category of electric vehicles. Battery switching has three major advantages over traditional EV charging systems: it saves time, space, and money if each swappable battery is being used.

It went on to say that in order to encourage the adoption of battery as a service (BaaS) models and EVs with swappable batteries, this regulation aims to level the playing field across business models including the sale of EVs with fixed or swappable batteries. The kWh rating could be used to determine the size of the incentive.

Heavy Penalty, If EV manufactures are found to be at fault: Gadkari

Transport Minister Nitin Gadkari slammed EV makers on Thursday, saying that if any company is proven to be negligent in their operations, a penalty will be applied and all defective vehicles will be recalled. Over half a dozen EV fires have been reported around the country in the last month, with two people losing their lives.

Ola Electric, Okinawa, Pure EV, and Jitendra EV are the companies engaged. “In the last two months, there have been several mishaps using electric two-wheelers. It is tragic that some people have died and others have been hurt as a result of these tragedies… In a series of tweets, the Union Minister said, “We have constituted an expert team to investigate these instances.”

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