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Govt. initiatives for Electric Vehicles
Govt. initiatives for Electric Vehicles

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The govt of India has announced various initiatives for the promotion of electric vehicles across the country, whether though schemes for wider acceptance of EVs, or subsidies to encourage consumers to purchase EVs, or other policies which help in developing the overall ecosystem.

  • Govt schemes for promotion of EVs
  • FAME II – Now in its second phase, govt. approved an outlay of ₹ 10,000 for this scheme for a period of 3 years commencing from 1st April 2019. Out of total budgetary support, about 86% of funds has been allocated for Demand Incentive to create demand for Electric Vehicles (xEVs) in the country. This phase aims to generate demand by way of supporting 7000 Electric Buses (e-bus), 5 lakh Electric Three Wheelers (e-3W), 55000 Electric Four-Wheeler Passenger Cars (including Strong Hybrid) (e-4W) and 10 lakh Electric Two Wheelers (e-2W).

 

  • PLI schemes have been approved by the govt. for manufacturing of Advanced Chemistry Cell (ACC) to bring down prices of battery in the country. This has a budgetary outlay of ₹ 25,938 crore for a period of five years.

 

  • Other govt incentives include reduction of GST on electric vehicles from 12% to 5%; on chargers/ charging stations for electric vehicles from 18% to 5%, GST of 5% on EVs with or without EV battery pack from the current 18% for Li-ion batteries, exemption from permit requirements, waiver of road tax on EVs, among others.

 

  • Subsidies by state govts.

State governments have offered many subsidies to encourage consumers to purchase the electric vehicles. Some subsidies in select states are shared below.

Capital Subsidy

Delhi

Gujarat

Assam

Odisha

Maharashtra

Manipur

2W

Purchase Incentive: INR 5,000/kWh up to INR 30,000

INR 10,000 / kWh

INR 10,000 / kWh

15% up to INR 5000

INR 5,000/kWh up to INR 10,000 for the first 1 lakh electric 2-wheelers

INR 10,000 / kWh up to INR 1.5 lakhs for the first 3,500 electric 2-wheelers

3W

Purchase Incentive of INR 30,000 and Interest subvention of 5% on loans and/or hire purchase scheme for the purchase

INR 10,000 / kWh

INR 10,000 / kWh

15% up to INR 12,000

INR 5,000/kWh up to INR 30,000 for the first 15,000 electric 3-wheelers autos and INR 5,000 / kWh up to INR 30,000 for the first 10,000 electric 3-wheelers goods carrier

INR 4,000 / kWh up to INR 5 lakhs for the first 200 electric 3-wheelers

4W

Purchase Incentive of INR 10,000 / kWh up to INR 1.5 lakhs for the first 1000 e-cars

INR 10,000 / kWh

INR 10,000 / kWh

15% up to INR 1,00,000

INR 5,000/kWh up to INR 1,50,000 for the first 10,000 electric 4-wheelers cars and INR 5,000 / kWh up to INR 1,00,000 for the first 10,000 electric 4-wheelers goods carrier

INR 4,000 / kWh up to INR 15 lakhs for the first 2500 electric 4-wheelers

Others

Purchase Incentive of 30,000 for the first 10,000 e-carriers & Interest subvention of 5% on loans and/or hire purchase scheme for the purchase

 

 

e-buses: 10% up to INR 20 lakhs and Goods carriers: Purchase incentive of INR 30,000 for the first 5000 electric goods carriers

10% of the ex-factory cost up to INR 20,00,000 for the first 1000 e-buses

INR 4,000 / kWh up to INR 2 crores for the first 30 electric buses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • Special concessional tariffs for EV charging –

Various state govts. have provided new rates at a concession for charging specifically for charging of electric vehicles. Some special rates include –

  • Maharashtra – Rs. 4.05 to 4.24/ kWh
  • Delhi – Rs. 4.5/kWh
  • UP – Rs. 5.9-7.7/kWh
  • Karnataka – Rs. 5/kWh etc.
  • Charging infrastructure and battery swapping policy -
    • In Feb 2022, Ministry of Power has introduced Policy for Electric Vehicle charging stations, including details for tariffs for supply of electricity for Public Charging Station (PCS), installations of charging stations in public spaces, charging rates etc.
    • Niti Aayog released a draft Battery Swapping Policy in April 2022, which prescribed details regarding technical and operational requirements for swapping, financial support, business models, recycling of batteries, framework for implementation.
  • Govt’s push towards Paris Agreement

Under the Paris agreement, India has committed to cut greenhouse gas emissions intensity of its gross domestic product 33% to 35% by 2030, increase non-fossil fuel power capacity to 40% from 28% in 2015 and substantially boost forest cover to reduce carbon dioxide.

Moreover, govt’s push towards an integrated multi-modal transport system may also further provide a significant push to EV adoption.

While the road is long, but massive headway is already being made which will propel Indian EV market to newer levels.


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Vandhna Babu
Principal Analyst - Research

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