Budget 2025: Key Announcements for the Auto Sector, Including Price Cuts on Electric Cars

01 Feb 2025

Today, Finance Minister Nirmala Sitharaman presented the Union Budget for 2025 in Parliament. The government has placed significant emphasis on the welfare of the common man, with several major relief measures aimed at benefiting them. Prime Minister Modi had previously referred to this budget as the "Common People Budget." The finance minister made several key announcements, including important measures for the auto sector.

Electric Cars will be Cheaper

The government has announced in this budget that electric car prices will be lowered, and a subsidy will be provided for purchasing electric vehicles. This move is likely to boost demand for EVs in the market.

Furthermore, in her budget speech, the finance minister highlighted that significant exemptions will be given on the production of lithium batteries and related sectors. The government's aim with this initiative is to encourage local manufacturing and reduce the country's growing reliance on foreign imports of lithium batteries.

BCD Abolished to Promote Electric Vehicles

The government has eliminated the basic customs duty (BCD) on a variety of materials, including cobalt, lithium-ion battery scrap, lead, zinc, and 12 other minerals. These materials are essential for producing batteries, semiconductors, and renewable energy equipment. By removing the BCD on these materials, it is expected to boost the production of clean energy, electronics manufacturing, and electric vehicles (EVs). In addition to these, the BCD has also been waived on several other components used in the manufacturing of EVs.