MUMBAI :

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 years. The state aims to become a hub for e-vehicles and various materials related to it. 

Shailesh Chandra, President, Passenger Vehicle Business Unit, Tata Motors, says, “We welcome the move by the Gujarat Government, offering incentive support for all categories of electric vehicles. This clearly signals a strong resolve of the government towards cleaner environment and a sustainable future for the country. Also, the support extended towards charging infrastructure will accelerate the ecosystem development and bring a greater comfort for EV buyers. We compliment the Gujarat Government for introducing such a progressive policy.”

Currently, Gujarat has 278 charging stations in the state for EVs and the state said it will provide approval to petrol pumps for establishing charging stations. Moreover, the e-vehicle registration at Gujarat RTO will be exempted from registration fees within four years. 

“This is over and above the FAME II incentives of INR 15,000 per KWh for EV manufacturers recently announced by the Central Government which amounts to INR 48,000 per bike for Revolt Motors. Combining the two incentives, it would mean incentives of atleast INR 68,000 per bike sold by Revolt Motors, in Gujarat. This policy could mean incentives of more than INR 870 crores for 2 lakh EVs to be sold in Gujarat,” says e-bike maker, RattanIndia’s Revolt Motors in a statement.

“Gujarat follows suit on incentives by various state governments to encourage EV adoption in their states. Delhi Government gives direct incentive of INR 5,000 per KWh or about INR 16,200 per bike for Revolt customers. Similarly, Meghalaya has incentive of INR 32,000 per bike for Revolt and Bihar has also proposed a similar amount as incentive. In addition, states of Telangana, Tamil Nadu and Delhi have also waived off the road tax for EV two wheelers,” adds the RattanIndia’s Revolt Motors statement. 

In 2020, Delhi government had announced its EV policy under which it said it will offer financial incentive of INR 1.5 lakh on EV cars and INR 30,000 on e2Ws, among others. The Delhi government had also said that it expects to have 25% of the new vehicles registered by 2024 to be EVs from 0.2% currently.

“India's EV revolution is coming. From Karnataka in 2017 to Gujarat just this week, 21 states and UTs are now incentivising EVs to make them affordable. We are committed to accelerating this with the Ola Futurefactory and our Ola scooter that's coming soon," says Bhavish Aggarwal, Chairman and Group CEO, Ola. 

Uday Narang, Chairman, Omega Seiki Mobility, says “The expenditure of INR 870 crore over the next 4 years will help EVs embellishment in the state of Gujarat. We at Omega Seiki Mobility support this initiative and feel it’s a major step in building up the EV’s Ecosystem. We have already deployed our products in the State and will pass on the benefit to the customer.”

“The Government and innovative manufacturers like us are opting for every possible step to provide a sustainable and carbon footprint-free mobility solution, and now it's time for the customers to take advantage of this,” says Yatin Gupte, Chairman and MD, Wardwizard Innovations and Mobility Limited, makers of Joy e-bikes. 

Recently, the Department of Heavy Industry announced amendment in the Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) under which the demand incentive for electric two-wheeler makers was revised to INR 15,000 per KWh from INR 5,000 KWh earlier. Overall, the cap of incentives on e2Ws is kept at 40% of the value of vehicle.