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States Offering Most Subsidies for Electric Vehicles

In India, barely 1.3 percent of the total vehicle sales account for electric vehicles. In FY21, only 2.38 lakh electric vehicles were sold when compared to petrol and diesel vehicles, which accounted for 1.86 crore. This is because the EV ecosystem is still in its nascence stage in the country despite the effort of the government to push for adoption of electric vehicle through its Faster Adoption and Manufacturing of Hybrid and Electric Vehicle (FAME) scheme. Here, we look at some states of the country which offer the most subsidy for makers and buyers of electric vehicles. Read on to know more about it.

  • Telangana – In the state of Telangana, the electric vehicle policy was rolled out in 2020. It offers 100% exemption on registration and road tax for all categories of electric vehicles. However, no kind of subsidies is being offered. The state government is currently studying the restructured FAME scheme and the policies offered by other states. It needs to be mentioned here that strong supply-side incentives such as capital investment subsidy of up to Rs.30 crore, power tariff discount and interest subvention of up to Rs.5 crore, and SGST reimbursement of up to Rs.5 crore per year is being offered by the state. In addition to that, tailor made benefits to mega and strategic projects on a case-to-case basis is also offered.
  • Karnataka - Karnataka government which has recently launched the electric bike taxi scheme was the first state in the country to launch an electric vehicle policy. It was launched in the year 2017. If you buy an electric vehicle in the state, subsidy under the central government’ FAME scheme can be availed while for investing in the EV sector 15 percent capital subsidy can be availed. It must be noted here that the state plans to replace 50% of the state government vehicles to electric in the coming years.
  • Maharashtra – When it comes to consumers and manufacturers, the electric vehicle policy of Maharashtra is the most recent and friendly one. This is because the state offers an incentive of Rs.5000/kWh for all vehicle categories along with an early bird discount of Rs.5000/kWh. The maximum subsidy you can get for electric two-wheelers is Rs.10,000 while for three-wheelers and four-wheelers, the subsidy is Rs.30,000 and Rs.1,50,000. For electric buses, the subsidy is Rs.20 lakh. Maharashtra also offers subsidy for scrapping your old petrol two-wheeler. You can get subsidy up to Rs.7,000 for purchasing a new electric two-wheeler by scrapping your old petrol vehicle. Automobile companies are provided incentives by the state government for providing a 5-year battery warranty to customers.
  • Delhi - Delhi, which launched the electric vehicle policy in 2020 is in the process of making some slight changes even though its policy is the most comprehensive one in the country. One of the tweaks which is proposed is including guidelines for an electric bike taxi scheme like the one introduced by the Karnataka government. It needs to be mentioned here that Delhi government offers subsidy of Rs.5,000/kWh on electric two-wheelers, which is subject to a maximum of Rs.30,000. For electric three-wheelers and cars, the subsidy offered is Rs.30,000 and Rs.1.5 lakh respectively. In addition to that, the government also offers scrapping incentives in the range of Rs.5,000 to Rs.7,000, waiver of registration charges and road tax on e-vehicles.
  • Gujarat – Gujarat offers the highest subsidy of Rs.10,000/kWh among all the states. The maximum subsidy you can avail for purchasing an electric two-wheeler is Rs.20,000 while for three-wheelers and electric cars, the state has capped the maximum subsidy at Rs.50,000 and Rs.1.5 lakh respectively. On the charging front, Gujarat is offering a maximum subsidy of Rs.10 lakh with the aim of setting up about 528 charging stations in the state. While the state government hasn’t waived off the road tax on electric vehicles, it has announced a waiver of registration charges.

While a variety of factors like charging stations, battery life, and running cost force buyers to think twice before buying an electric vehicle in India, it is getting easier as many states in the country are coming up with EV policies, waiver of road tax, registration charges, and offering subsidies. With introduction of Ola Electric and Tesla launching its sales, this are exciting times for the country’s EV sector.

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