As Budget 2026–27 approaches, the auto and electric vehicle sector is urging the government to adopt policies that go beyond the adoption target and focus on cost structure, localization gaps, and implementation issues in the value chain.
One of the most important areas that are still influencing the cost of EVs is the battery ecosystem. Muthu Subramanian, Managing Director, Yuma Energy, says that although the adoption of EVs is increasing, “battery cost and availability are major constraints, which have a significant impact on vehicle pricing, particularly in two- and three-wheeler vehicles.” Subramanian emphasizes that speeding up the development of domestic battery cell production is essential to reduce dependence on imports and price fluctuations.
Echoing the same sentiment, Pratik Kamdar, Co-founder and CEO, Neuron Energy, says that the demand for lithium-ion batteries is expected to register a CAGR of almost 39 percent until 2030. “Timely implementation of PLI schemes, simplified access to long-term capital, and streamlined project approvals will be essential to stabilize manufacturing facilities,” he says, while emphasizing the need for upscaling skills and testing infrastructure to match capacity additions.
From the auto component side, Ravi Mehra, Managing Director, Uno Minda, emphasizes the need to enhance value addition. “Extending the PLI-Auto scheme to include EV component categories such as sensors, semiconductors, and advanced electronics will help enhance the competitiveness of domestic manufacturing,” he says. Mehra also draws attention to inverted duty structures and customs rationalization, which are long-pending issues that impact cost competitiveness and exports.
Technologies and testing capabilities are also being emphasized. Aveen Padmaprabha, Business Head – Industrial Quality Solutions, ZEISS Group India, says that Budget 2026 offers an opportunity to enhance automotive component manufacturing by offering “specific incentives for EV components, harmonized GST rates, and expanded PLI schemes.” He also emphasizes the need to address high import duties and cess credits to enhance localization outcomes.
The auto and EV industry is also seeking consistency in policies rather than new initiatives. Specialty materials and energy storage companies are also seeking greater alignment between incentives and outcomes. Anurag Choudhary, CMD and CEO, Himadri Specialty Chemical Limited, says that while initiatives like FAME and ACC PLI have improved the EV value chain, “greater alignment between fund disbursement and outcomes is required. Greater R&D spend on battery materials and next-generation energy storage solutions are required.” The auto and EV industry is seeking consistency in policies rather than new initiatives.
