Ather Energy calls for cut in import tariff on lithium ion cells for EVs

To promote manufacturing of electric vehicles in India, import duties on fully built batteries need to be increased while the same should be reduced on lithium ion cells, motors and motor controllers, according to electric-two wheeler maker Ather Energy.

Ahead of the interim-Budget, the Bengaluru-based firm in which two-wheeler major Hero MotoCorp is an investor, also said policy intervention for at least 3-5 years is necessary, as lack of predictability in policy becomes a deterrent for the industry to make long term investments.

Under the current circumstances, the cost structures make it largely unviable for manufacturing electric vehicles in India, Ather Energy Co-Founder and CEO Tarun Mehta said in a statement.

Component cost, encouraging 'Make in India' and rationalisation and simplification of the GST structure, are the three key areas which EV makers like Ather would like the government to focus on the upcoming interim Budget, he added.

He further said,"these three account for a major proportion of the vehicle cost and any relief on these would provide strong financial support for original equipment manufacturer (OEMs) to bring out vehicles that are near-equal performance to petrol/diesel vehicles."

"To address the key cost challenges that industry faces, we would like to see reduced import duties on lithium ion cells, motors and motor controllers," Mehta said.

Mehta also said to encourage Make in India, "we would recommend an increase in import duty for fully assembled batteries, since there are local options available in India."

Highlighting another area of concern for EV makers, Mehta said the government should do away with the inverted GST structure.

Under the present system, EV makers "collect 12 per cent on selling our vehicles and pay 18 per cent GST on raw materials and expenses", he added.

Seeking a stable policy regime, Mehta said,"any policy intervention needs to be committed for 3-5 years. A lack of predictability in government policy becomes a deterrent for the industry to make long term investments, which impacts the growth of the industry.