With India targeting 50% EV sales by 2030, Abhishek Mundada, Partner at Dhruva Advisors, has urged the government to introduce critical tax incentives for both EV buyers and manufacturers in the Union Budget 2025 to accelerate adoption and infrastructure development.
“One may note that the Government has announced its target to achieve net zero emissions by 2070 at the 26th Conference of Parties (COP). To meet this, the Environmental Ministry recently raised its EV sales target to 50% of new car sales by 2030, up from the earlier goal of 30%,” Mundada stated. However, EV sales currently stand at just 7.4% of total new car sales, highlighting the significant gap that needs to be covered.
To boost EV adoption, Mundada recommended reinstating Section 80EEB tax benefits, which previously allowed individuals to claim up to ₹1.5 lakh deduction on interest paid on EV loans for purchases made between April 1, 2019, and March 31, 2023. “The government did not extend this benefit in Budget 2024, but considering the need to increase EV adoption at scale, it is crucial to revive and extend this tax concession at least until 2030,” he emphasized.
From a manufacturing perspective, he proposed extending the concessional 15% corporate tax regime to all players in the EV supply chain, including those investing in charging infrastructure. This would encourage more investments and affordability in the sector, making EVs more accessible to consumers.
“These measures would encourage potential car buyers to opt for EVs, providing the necessary momentum for the industry to achieve India’s ambitious sustainability goals,” Mundada concluded.
As Union Budget 2025 nears, the EV industry is keenly awaiting policy measures that will drive affordability, infrastructure expansion, and large-scale adoption to position India as a global leader in eMobility.
