GST rate cut drawing firms to EV business, but viability remains an issue

The availability of lithium-ion batteries will be a critical determinant of EV adoption by consumers

Last week, the GST council cut rate cuts on electric vehicles (EVs) from 12 per cent to 5 per cent and on electric chargers from 18 to 5 per cent, a clear signal that it proposes to forge ahead with its target of reducing urban pollution and crude oil import bill. Both rate cuts will considerably narrow the price differential between EVs and petrol and diesel vehicles. EV prices are expected to drop 7 per cent.

But narrowing the price differential is just one of the challenges to achieving the government’s grand mandate. The lack of a robust ecosystem, principally