By : SHWETA BHANOT MEHROTRA
The Maharashtra state government has announced a revised Electric Vehicle (EV) policy 2021 under which it is targeting a 10% penetration of EVs in the new vehicle registrations in the state by 2025. This includes at least 25% electrification of urban fleet aggregators in the e-commerce, delivery and logistics domains. In April next year, it aims to go all-electric for new government vehicles. In addition, the state government plans to electrify the public and last-mile delivery transport by 25% and 15% of the bus fleet of its state-owned road transport unit respectively.
Maharashtra aims to be India’s top producer of BEVs in terms of annual production capacity. It will develop 2,375 public and semi-public charging stations in seven major urban areas and four national highways. It will earmark INR 930 crore over a four-year period to promote EV adoption and create charging infrastructure. Its budget is expected to be funded through a combination of a green cess levied on the registration of old vehicles, and fuel cess.
To boost EV adoption, the Maharashtra government is providing a slew of incentives including “property tax rebates for installing private charging infrastructure within housing colony premises” and “exemption from road tax and registration charges for EVs sold in the state”. It will also provide a demand incentive of INR 29,000 to INR 44,000 on e2Ws and INR 1.75 lakh to INR 2.75 lakh on e4Ws that will be channeled to buyers “upfront through vehicle manufacturers and dealers.”
Nakul Kukar, Founder and CEO, Cell Propulsion, an electric mobility start-up founded by former ISRO engineers, said, “The revised policy’s focal point of bringing ease to consumers and manufacturers is much appreciated. There is a strong emphasis on establishing a robust charging infrastructure which will help reduce range anxiety and increase EV penetration in the state. We also look forward to the government’s supply chain or eCV-centric incentives.”
“Maharashtra has traditionally been a major auto production hub and these incentives will help in accelerating EV adoption as well as development of the EV ecosystem,” says Shamsher Dewan, Group Head & Vice President - Corporate Sector Ratings, ICRA Limited. He adds, “Given the state's sizeable contribution to overall vehicle sales in India, the policy's allocation towards demand incentive (including an early bird discount) is a major positive. The combination of various benefits offered as part of the policy will help in reducing the price-gap between EVs and ICE significantly, especially for e2Ws and e3Ws.”
In terms of automobile sales, during FY2021, Maharashtra was the largest state accounting for about 10% of domestic PV wholesale dispatches. Even in electric vehicle sales, Maharashtra accounted for 8% of total EV registrations in Q4 FY2021.
Nagesh Basavanhalli, Managing director & Group CEO, Greaves Cotton, and Director, Ampere Vehicles, says, “Maharashtra’s policy will not only boost the growth of electric vehicles but will also provide jobs at various levels and give an impetus to establishing charging infrastructure.”
Calling it visionary, Shailesh Chandra, President, Passenger Vehicle Business Unit, Tata Motors, says, “The state’s EV policy shows the state’s strong resolve and the support extended in increasing charging infrastructure will offer EV owners a hassle-free commute.”
Tarun Mehta, CEO and Co-Founder, Ather Energy, says, “The incentives offered for both the demand and supply side will accelerate the adoption and the manufacturing of EVs in the country. In addition to demand incentives, the policy also incentivizes buy-back and vehicle scrappage.”
“Added subsidies from the government on batteries and overall vehicles apart from encouraging battery makers to invest in the state will only help growing interest among investors and companies keen to manufacture EV parts,” says Sohinder Gill, CEO Hero Electric & Director General, SMEV.
These incentives being offered by Maharashtra will add on to the recently-announced incentives by the Centre. Recently, the Department of Heavy Industry announced amendments in the Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) under which the demand incentives for electric 2W manufacturers has been 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.
In a statement, RattanIndia’s Revolt Motors, says, “These incentives by the Central Government and various state governments show the seriousness of the government to encourage manufacturing and EV adoption in country. With falling battery prices, EV bikes prices are already comparable to their petrol counterparts.”
Maharashtra’s EV policy follows those announced by various other governments to encourage EV adoption. Most recently, Gujarat announced a comprehensive electric vehicle (EV) policy effective July 1st, 2021. It is providing a 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 lakhs for e4Ws both personal and CV. These incentives are linked to the battery capacity of EVs and are in line with the state’s target to have 200,000 EVs on the roads in Gujarat in the next four years. The state aims to become hub for e-vehicles and various materials related to it.
In August 2020, the Delhi government had announced its own electric vehicle policy to boost the economy, create jobs and control pollution. The Delhi government expects to have 25% of the new vehicles registered as EVs by 2024 from 0.2% currently. It is also offering financial incentives of INR 1.5 lakh on EV cars, and INR 30,000 on two-wheelers, autorickshaws, e-rickshaws and freight vehicles each, in addition to a road tax waiver.
Meghalaya, Bihar, Telangana and Tamil Nadu have also have announced various incentives to boost sales of EVs. It remains to be seen which of these individual policies electrify consumers’ choices in favour of eco-friendly transport.