Eight states in India are racing ahead, boosting electric vehicles through policy groundwork

India’s first electric three-wheeler, Vikram SAFA, was developed by Scooters India Limited in Lucknow in 1996. Manufacturing an electric vehicle was a novelty then, but today there is a dire need to shift to clean mobility, given the harm vehicular pollution is inflicting on the environment.

Electric Vehicles (EVs) are becoming increasingly popular in India due to multiple reasons such as eco-friendliness, cheaper fuel cost, lower maintenance expenses, etc. The Centre has also taken many initiatives to give a boost to EVs. In 2013, the Government of India launched a National Electric Mobility Mission Plan 2020. Under the mission, in March 2015, the Scheme for Faster Adoption and Manufacturing of (Hybrid&) Electric Vehicles in India (FAME India) was launched for two years under Phase-I, which was subsequently extended up to March 31, 2019.

Further, in 2017, the Centre launched the EV@30 campaign to set a collective aspirational goal for all Electric Vehicles Initiative (EVI) members to have EVs contribute to 30 percent of all vehicle sales by 2030. India is a member of the EVI, which is a multi-governmental policy forum dedicated to accelerating the deployment of EVs.

The Centre’s decision to announce the FAME 2 scheme, with an outlay of Rs 10,000 crore, also indicates a shift towards EVs. The EV industry witnessed a growth of 124 per cent selling 56,000 units in FY18 as against 25,000 units in FY17. However, the sale of electric cars slumped. According to Society of Manufacturers of Electric Vehicles in FY18, the sale of electric cars came down to 1,200 units from 2,000 units in FY17, showing a drop of 40 per cent.

There are many players in the EV segment in India. In the car segment, the leading player is Mahindra Electric while others like Toyota, Maruti Suzuki, and Tata Motors also have their models. In the two-wheeler segment, Hero Electric, Ather Energy, and Ampere are some of the key players.

Despite these initiatives, pure electric vehicle penetration (in 2017) remained quite low in India. This was largely driven by critical hurdles like high upfront purchase price of EVs, non-existent public charging infrastructure, and low levels of investments in EV manufacturing.

However, unlike the Centre, a handful of states have managed to put a policy in place in order to give some certainty to electric vehicle manufacturers. These states are in sync with the Centre coming out with a specific policy to promote EVs with a mix of incentives, fiscal sops, and encouragement to expand this ecosystem.

YourStory profiles the EV policy of various states.

Karnataka

Karnataka was the first state in the country to introduce a policy dedicated to electric vehicles. The Karnataka Electric & Energy Storage Policy, 2017, operational for five years, is expected to give the necessary impetus to the electric mobility sector in the state, and attract investments. The Government of Karnataka intends to make Bengaluru the Electrical Vehicle Capital of India.

Key highlights

• Attract investments of Rs 31,000 crore and create 55,000 jobs - both from supply and demand side.
• Create a conducive environment for transition to EVs from the Internal Combustion (IC) engines.
• Focus on developing R&D, and special initiatives for EV manufacturing such as making industrial land available to create EV manufacturing zones.
• Support for charging infrastructure, and research development and skill development incentives and concessions.
• A startup incubation centre for EVs, and startups will be encouraged to develop business models focused on EVs.
• A venture capital fund for research in EV mobility.
• All electric vehicles, including e-rickshaws and e-carts, are already exempted from GoK payment of taxes.
• Policy to provide incentive to shift auto rickshaws, cab aggregators, corporate fleets and public transport systems into EVs.

Also read: Battery-ing down barriers: why electric vehicles are the future of transport in India and the world

Delhi

The city, which has the unwanted reputation of being one of the most-polluted cities in the world, is striving hard towards a cleaner environment. The draft EV policy was introduced by the Delhi government in 2018, and it seeks to drive rapid adoption of Battery Electric Vehicles (BEVs) so that they contribute to 25 percent of all new vehicle registrations by 2023.

Key highlights

• Policy to incentivise purchase of EVs and support electrification of public and shared transport.
• Road tax, registration charges, one-time parking fee, and auto rickshaw permit fees to be waived for e-autos.
• App-based aggregators and ride-hailing service providers to be encouraged to create fleet of e-vehicles.
• Public transport to have 50 percent electric buses by 2023.
• Policy to encourage adoption of electric three-wheeler goods carriers.
• Charging infrastructure in private and public places.
• Petrol and diesel-powered vehicle users to pay a ‘pollution cess’ on fuel (higher cess on diesel) starting April 2019.

Maharashtra

The state introduced its EV policy in 2018 with the aim to make Maharashtra among the most-preferred EV investment destinations for global investors through promotional strategies, combined with developing a competitive and sustainable investment environment.

Key highlights

• Increase the number of registered EVs to five lakh.
• To generate an investment of Rs 25,000 crore for EVs and EV infrastructure, and create jobs for 1,00,000 people.
• Provide fiscal and non-fiscal incentives to increase viability of EVs.
• Promote creation of dedicated EV charging infrastructure through subsidised investment.
• Promotion of R&D and innovation.
• Petrol pumps will be allowed to set up charging stations freely, subject to regulations.
• To promote EVs in public transport in six cities, i.e. Mumbai, Pune, Aurangabad, Thane, Nagpur, and Nashik.
• The first 1,000 private/public passenger electric bus buyers will be eligible for user subsidy for five years, and the first 100,000 EVs across categories will get end-user subsidy for five years.
• Exemption from road tax and registration fees.

Also read: Ola, Mahindra, Bounce: meet the companies lighting up the road for electric vehicles to go the distance

Uttar Pradesh

Lucknow, the capital of Uttar Pradesh, is one among the 10 cities identified for pilot project of Multi-Modal Electric Public Transport, under the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME) scheme. Keeping this in mind, the state government came out with the Uttar Pradesh Electric Vehicles Policy, 2018.

Key highlights

• To establish UP as a preferred destination for attracting investments in EV manufacturing.
• Create employment opportunities.
• Create a conducive environment to shift from internal combustion (IC) engines to EVs.
• Encourage use of Hybrid EVs during the transition phase.
• Develop human capital and augment the power capacity to meet the needs of the industry.
• Promote EVs in public transport by introducing 1,000 EV buses in phases by 2030. This will also introduce green routes in select destinations.
• Promote EV battery and charging equipment manufacturing, and incentivise manufacturing of Hydrogen-powered fuel cells and solar-powered cells.
• Ensure quality infrastructure to develop the state as EV manufacturing hub.
• Setting up EV incubation centres at IIT-Kanpur and other leading engineering institutions to encourage business models on EVs.
• 100 percent road tax exemption on EVs purchased within the state.

Telangana

The state of Telangana introduced its EV policy in 2018 to showcase a model of international standards for electric vehicle adoption across segments, supported by world-class infrastructure and ecosystem.

Key highlights

• To attract investments worth $3 billion and create employment for 50,000 people by 2022.
• Provide ecosystem and infrastructure to make Telangana the EV hub of India.
• Develop a proving ground for viable business models through accelerated demand for EVs.
• Promote innovation in EVs and other trends such as autonomous/connected mobility.
• Creating a pool of skilled workforce for the industry.
• Create a conducive environment for industry and research institutions to focus on EV technologies.
• Roadmap for developing charging infrastructure.
• Mandating use of EVs at an institutional level.
• Establishing a startup ecosystem to nurture innovation in EV technology space.
• Road tax exemption for all electric vehicles till 2025.
• 100 percent electric buses by 2030 for intra-city, intercity, and interstate transport.
• A separate power tariff will be created for EV Charging, both public and private.
• A mobility engineering cluster (on the lines of the MCity at University of Michigan, US) will be developed.
• An innovation fund will be created to offer financial support to EV OEMS, ancillaries, and startups for research and innovation in battery technologies.

Also read: These electric bike startups are spearheading India's switch to clean energy

Andhra Pradesh

The Government of Andhra Pradesh has the ambitious plan of putting 10 lakh EVs on the road in the next five years, which will be aided by fiscal incentives to become one of the important hubs for this segment in the country. The state launched its Electric Mobility Policy in 2018.

Key highlights

• To attract investments of Rs 30,000 crore by 2030.
• Create employment for 60,000 people.
• Battery manufacturing units in Amaravati.
• Advanced battery manufacturing units of 10 GWh.
• One lakh EV charging stations will be built by 2024.
• All government buses and commercial vehicles will be made electric by 2024.
• Stamp duty and GST reimbursements on purchase or lease of land for EV manufacturing in Amaravati, and no registration fee on electric vehicles.
• Development of EV manufacturing hubs.

Kerala

Kerala also came out with an electric vehicle policy in 2018, which seeks to reduce the number of vehicles running on fossil fuels with the introduction of electric buses in public transport and e-autorickshaws. It is aiming for full electrification of all types of motor vehicles by 2030.

Key highlights

• To have one million EVs in the state by 2022.
• Pilot EV fleet of 200,000 two-wheelers, 50,000 three-wheelers, 1,000 goods carriers, 3,000 buses, and 100 ferry boats.
• To attract investments in power electronics and battery pack assembly, which will also provide employment opportunities.
• Targeting over 6,000 electric buses in public transport by 2025.
• Creating common charging infrastructure that will be interoperable with several models of EVs.
• Create awareness and promotion of shared mobility.
• Building human resources in the area of EV, which would also mean reskilling.

Uttarakhand

The hilly state of Uttarakhand came out with its EV policy in 2018. The state wants to create a conducive atmosphere to support manufacturers, and reduce vehicular pollution. It is also looking to create jobs in the state.

Key highlights

• To waive off motor vehicle tax for the first 100,000 customers purchasing EVs for a period of five years.
• The first 100,000 customers purchasing commercial EVs or electric stage carriages will also be able to avail exemption from tax.
• Investors in the EV segment will be entitled to have 100 percent electricity duty exemption.

Also read: The future is electric: how bike-sharing and rental startups are trying to crack unit economics