Gujarat announces comprehensive EV Policy; aims to become EV hub

Gujarat has become the latest state to announce a comprehensive electric vehicle (EV) policy. While automakers across segments have welcomed the move that will see the enabling of faster adoption of electric vehicles in the country, one needs to keep an eye on how these incentives will unfold vis-a-vis higher buyer demand. "In line with its clear policy to encourage EV adoption, the Government has extended the FAME II policy by 2 years. This, coupled with recent changes in incentive structure and introduction of EV policies by select states, will enable faster penetration of EVs, especially two-wheelers and three-wheelers," says Shamsher Dewan, Vice President and Group Head- Corporate Sector Ratings, ICRA Limited. Under Gujarat’s EV policy that comes into effect from July 1st, 2021, the Gujarat government will provide Direct Benefit Transfer (DBT) incentive of INR 10,000 per kWh on electric vehicles. To avail this incentive, the maximum ex-factory price for e2Ws will be up to INR 1.5 lakh and INR 15 for e4Ws both, personal and commercial vehicles. These incentives are linked to the battery capacity of EVs and are in line with the state’s target to have 2 lakh EVs on the roads in Gujarat in the next four