Electric vehicles must be considered for priority lending by the government to accelerate their adoption, while sufficient funds must also be allocated for R&D in a public-private partnership mode for development of batteries, industry body SMEV said on Thursday.

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In its Budget wish list, the Society Of Manufacturers Of Electric Vehicles (SMEV) also said there is a need to amend the PLI scheme for automobile and auto components, as in its current form there is an "unfair price disadvantage" for small and medium-size EV players in the industry.

"To create a robust ecosystem for electric vehicles and give a boost to the EV market, the government could look at putting EVs in the priority lending sector. It will help citizens afford EVs at lower interest rates," SMEV said in a statement.

Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget for FY 2022-2023 on February 1.

Stressing on the need for R&D in battery manufacturing, the body of EV makers said, "unless we work seriously and diligently on EV batteries, we will end up in a situation similar to, if not worse than, our dependence on crude oil."

The current level of research is abysmally low, diluted, and scattered, it said adding, "the government could allocate sufficient funds for R&D in a public-private partnership mode with a time-bound objective to create EV batteries that are less dependent on offshore minerals and best suited to the Indian condition."

The PLI scheme for Advanced Chemistry Cell (ACC) can be suitably amended to incentivise the R&D efforts, it added.

Calling for amendment in the PLI scheme for automobile and auto components, SMEV said while the scheme will certainly have incentives for the large players, it is also creating an unfair price disadvantage for small and medium-size EV players who are not qualifying for the incentives under the scheme due to their size, turnover, and backgrounds.

"Hence, we request the government to create a level playing field through amendments in the scheme so that MSME EV players, all the pre-existing and new players can also participate," it said.

Under the current PLI scheme for automobile and auto components, among other criteria, an automobile company or group firm with existing presence in India or globally needs to have a minimum of Rs 10,000 crore revenue, while for auto components, the minimum revenue requirement is Rs 500 crore.

On the other hand, for new non-automotive investor companies or group companies, which are currently not in automobile or auto component manufacturing business, such entities should have a global net worth of Rs 1,000 crore based on audited financial statements for year ending March 31, 2021.

The industry body also sought export concessions for EVs in order to make manufacturers in India cash in on the growing demand for such vehicles across the globe.

"Some incentives can be extended in the form of subsidies to be enjoyed by domestic consumers for exporting such vehicles to get a global stamp on electric vehicles. This is a large space that Indian industries can capture before international players invade the market with cheaper contraptions," SMEV asserted.

Besides, in order to promote EVs, SMEV also mooted a citizen reward programme for EV users which can be used at various establishments and occasions to access fast track services or acquire points for the rewards and inclusion of clean air campaign in Swachh Bharat mission.