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tech2 News StaffSep 10, 2021 14:10:51 IST

Cost – that four-letter word has been one of the biggest hurdles standing in the way of electric vehicles. That, along with a lack of necessary infrastructure, has meant India’s vehicle industry has continued to rely heavily on the internal combustion engine. However, things are changing – with every passing day, electric vehicles are inching to being within reach of mainstream buyers, spurred on by India’s initiatives to promote e-mobility. The Central government offers sops under the national FAME-II scheme, and providing further impetus to the transition are individual state EV policies, which aim to make EVs even more affordable.

However, each state has its own criteria for electric vehicle subsidies, which means the benefits are more significant in some regions, bringing EVs closer to being an accessible option for mass-market buyers. So, which Indian state provides the heftiest subsidies on the purchase of an electric vehicle? Let’s take a closer look.

State-specific EV policies are further boosting electric vehicle uptake across the country. Image: Tech2/Rupixen.com via Pixabay

State EV subsidies on electric two-wheelers

State-specific EV policies have been drawn up for a four-to-five-year period from the time of notification, and will only subsidise a limited number of vehicles. Most Indian states, in their EV policies, have decided to allot subsidies for electric two-wheelers (that are eligible for incentives under the FAME-II scheme) on the basis of the size of their lithium-ion battery packs. The incentive amount is decided on a ‘per kWh of battery capacity’ basis, with only two states offering subsidies on a different basis.

Leading the way in terms of the highest subsidy available is Delhi, which offers an incentive of Rs 5,000 per kWh, and a maximum of Rs 30,000 (provided the battery is bigger than 5 kWh). Second on the list currently is Maharashtra, which, too, offers a subsidy of Rs 5,000 per kWh, with the total subsidy capped at Rs 10,000. However, with an early bird incentive (of up to Rs 15,000; valid only till 31 December, 2021), the total subsidy for any electric two-wheeler with a 3 kWh (or bigger) battery would be eligible for is Rs 25,000.

*including early bird incentive; ^policy yet to be approved

The states of Meghalaya, Assam, Gujarat and West Bengal offer a higher per kWh subsidy of Rs 10,000, with the total subsidy available capped at Rs 20,000. Bihar’s EV policy – currently yet to be approved – also offers similar benefits. Rajasthan offers a subsidy of Rs 5,000 for two-wheelers with a 2 kWh battery, and up to Rs 10,000 for one with a battery bigger than 5 kWh. Odisha, on the other hand, offers a flat subsidy of Rs 5,000.

States such as Andhra Pradesh, Karnataka, Madhya Pradesh, Telangana, Tamil Nadu, Uttarakhand, Punjab and Uttar Pradesh do not offer any direct subsidies to electric two-wheeler buyers under their policies.

Road tax for electric vehicles is completely waived in most of these states, except for in Gujarat and Kerala, where buyers have to pay 50 percent of the total road tax amount.

State EV subsidies on electric cars and SUVs

Just like with two-wheelers, electric cars and SUVs, too, are subsidised by state EV policies. However, the total number of vehicles covered under these policies are significantly lower. Electric cars have significantly larger batteries, and are eligible for a substantial amount of money in the form of subsidies. Most states have capped the total number of electric cars to be subsidised at 10,000 units. The ex-factory cost limit for eligible vehicles is pegged at Rs 15 lakh, which means at present, it’s only the Tata Tigor EV Ziptron and the Tata Nexon EV that qualify for incentives in all states. Larger, more expensive EVs – including the likes of the MG ZS EV and Hyundai Kona – do not qualify for these subsidies.

On the four-wheeler front, it is Maharashtra that currently leads the way. The base incentive of Rs 5,000 per kWh is the same as for electric two-wheelers, but the maximum subsidy is capped at Rs 1.50 lakh. However, with the early bird incentive (of up to Rs 1 lakh) accounted for, the total subsidy amount rises to Rs 2.50 lakh.

*including early bird incentive; ^policy yet to be approved

Delhi, Gujarat, Assam and West Bengal offer a higher per kWh incentive of Rs 10,000, but the total subsidy is limited to Rs 1.50 lakh. Bihar’s yet-to-be-notified EV policy also mentions similar benefits. Odisha offers an incentive of up to Rs 1 lakh for eligible vehicles, while Meghalaya – with an incentive of Rs 4,000 per kWh – offers a total subsidy of Rs 60,000.

Rajasthan, Andhra Pradesh, Karnataka, Madhya Pradesh, Telangana, Tamil Nadu, Uttarakhand, Punjab and Uttar Pradesh do not extend direct subsidies for electric cars and SUVs in their policies.
Once again, road tax for electric four-wheelers is completely waived in most states, except for in Gujarat and Kerala, where buyers have to pay 50 percent of the total road tax amount, and in Uttar Pradesh, where buyers are needed to pay 75 percent of the road tax amount.

Registration charges, meanwhile, have been waived for all kinds of electric vehicles across the country. In August, the Ministry of Road Transport and Highways (MoRTH) announced all battery-operated vehicles are exempt from ‘the payment of fees for the purpose of issue or renewal of registration certificate’.

This article will be updated as and when new policies are notified and existing policies are modified.