Electric vehicles with or without batteries will be taxed at 5%, clarifies finance ministry

According to a study by Arthur D Little, EV adoption for passenger vehicles is likely to be just 10 percent by 2030, amounting to a strikingly small 5 percent of total EV sales.

The study titled 'Unlocking India's electric mobility potential' noted that to attain more than 30 percent EV adoption, India will require approximately 800 GWh of batteries by 2030.

To meet this rising demand, India is accelerating plans to manufacture Lithium-ion cells within the country, anticipating $2.3 billion in government subsidies and more than $7.5 billion in investment potential, it said.

In terms of investment, given the Foreign Direct Investment (FDI) inflow of nearly $6 billion in 2021, India's EV industry could attract further foreign investments of about $20 billion by 2030, to fuel the country's economic growth and help achieve the required scale in this industry, as per the study.