PERSPECTIVE Incentives for supply and demand side of Electric Vehicles (EVs) On the initial road to an EV future, states including Telangana, Andhra Pradesh, and Tamil Nadu adopted an investor-friendly approach to make their states a preferred destination for EV and component manufacturing. They brought in incentives such as capital subsidies, tax exemptions and reimbursements, and the provision of interest-free loans to incentivize EV manufacturers. While on the other hand, several states have shifted their focus towards the most worrisome factor of the EV purchase cost. In addition to the direct purchase subsidy in the range of 28-44% of an EV’s cost from the central government under the FAME scheme, some states have announced additional purchase subsidies which further reduces 10-16% of EVs cost and addresses the issue of high upfront acquisition cost. In 2021, the top 5 states in terms of share in EV registration included Uttar Pradesh (~20%), Karnataka (~10%), Tamil Nadu (~9%), Maharashtra (~9%), and Delhi (~8%). Delhi and Maharashtra are among frontrunners in springing EV adoption with the introduction of liberal financial and non-financial incentives including purchase subsidies, vehicle scrappage incentives, and exemptions from vehicle registration and road tax. Maharashtra’s groundbreaking battery buyback incentive for e-2Ws and e-3Ws further bolsters consumers' and financial institutions' confidence in the new EV technology and encourages lenders to provide EV-specific loans.
Charging Infrastructure Deployment Charging infrastructure is the backbone of electric mobility and a lack of it is one of the key professed barriers for Indian consumers to shift to EVs. To tackle this, several state governments have made 360-degree efforts to make their cities EV ready with capital subsidies, bare minimum land rentals, earmarking public parking spaces, and involvement of public-private partnerships for charging infrastructure deployment. Moreover, buyers in Delhi and Maharashtra purchasing EVs (without batteries) fitted out with a battery swapping model are being given 50% of the purchase subsidy to promote usage of battery swapping as an alternative charging option. By the end of 2021, Delhi, Telangana, Rajasthan, Karnataka, and Chandigarh remained the top states/UTs with the highest number of public charging stations installed.
On-point of Implementation and Increasing sustainability Among states with EV policy, Delhi and Maharashtra have taken several steps to fast-track the implementation of the policy. Delhi’s vision towards reaching a 25% sales penetration by 2024 for EVs is supported by grass-root level implementation with its single-window clearance system, electrification mandates on delivery operators, and a corpus fund generated from levying taxes on polluting vehicles. While Maharashtra’s EV vision rests on mandates for public transportation & fleet operators and city-specific targets for EV charging infrastructure. Additionally, few states have introduced innovative measures to accelerate EV adoption and create a sustainable EV ecosystem. Assam and Telangana have introduced retrofit incentives to convert existing fossil fuel-powered three-wheelers (3Ws) into an e-3W at one-third of its purchase price while also reducing the environmental footprint of manufacturing a new e-3W. Moreover, Assam is enabling a more sustainable supply chain of batteries by promoting reuse of end-of-firstlife EV batteries as power banks to store renewable energy, and recycling of end-of-life EV batteries by providing remunerative prices to EV owners.
Summary India’s aspirations to achieve a 30% EV sales target by 2030 is anchored on strong government support at the national and state level. The multi-pronged approach and a clear vision adopted in several state EV policies provide a roadmap for local implementation plans to stimulate EV adoption. Besides, these policies bring in a hoard of opportunities to further strengthen the EV ecosystem in India with enabling action on manufacturing of EVs, directions for re-use, and recycling of EV batteries that simultaneously stage India as a self-reliant global EV leader.
DELHI AND MAHARASHTRA ARE AMONG FRONTRUNNERS IN SPRINGING EV ADOPTION WITH THE INTRODUCTION OF LIBERAL FINANCIAL AND NON-FINANCIAL INCENTIVES INCLUDING PURCHASE SUBSIDIES, VEHICLE SCRAPPAGE INCENTIVES, AND EXEMPTIONS FROM VEHICLE REGISTRATION AND ROAD TAX."
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FEB-MAR ISSUE 2022 | PG 22