By MT Bureau| Jul 16, 2021

Gujarat’s New EV Policy Rides On Lucrative Incentives To Bolster Sales

To bolster the sale of electric vehicles (EV) in the state, the Government of Gujarat has rolled out its new electric vehicle policy. The document titled ‘Gujarat State Electric Vehicle Policy 2021’ rides on lucrative incentives not only for the buyer but also for other parties involved in the manufacturing and upkeep of this segment of automobile. It envisions at least two lakh e-vehicles on the road by the end of the policy term, i.e., July 2024, which include 110,000 electric-two-wheelers, 70,000 electric-three-wheelers and 20,000 electric-four-wheelers.

Under the new strategy, buyers can avail a discount of INR 10,000 on every kilowatt of battery in all three vehicle segments. However, to avail the subsidy, the policy has also included a maximum ex-factory price of the vehicle. For 2-wheelers, the threshold has been set at INR 150,000 (ex-factory). In case of 3- and 4-wheelers, the amount is capped at INR 5 lakh and INR 15 lakh, respectively.

The purchaser will be entitled to the offers including those meted out by other central government schemes. The subsidy will be credited directly to the owner’s bank account by the state transport department through Direct Benefit Transfer (DBT) mode after verification of policy papers.

However, the beneficiary is entitled to anyone scheme of the central government and the amount of subsidy will vary on the battery capacity of the automobile. The maximum amount of grant will not be in excess of 40 percent of the ex-factory price.

The policy encourages business entities including those with electricity license to set up charging infrastructure of different battery capacities and swapping stations. Commercial charging stations for 2-, 3- and 4- wheelers are eligible to get a 25 percent cut on their capital for machinery. However, the ceiling has been set at INR 1,000,000 per station, and the first 250 booths will be eligible to get this benefit. It aims to add these stations to its current roster of 278 charging stations.

The policy also puts in place certain conditions for infrastructure developers. They can only avail the subsidy if they are not enlisted under any scheme of the central government. These businesses have to follow the guidelines laid out by the state power ministry and obtain a no-objection certificate from housing and commercial establishments where they plan to set up charging infrastructure.

Petrol pump owners can also set up stations under the new policy. The government has decided to waive off electricity duty for all EV charging stations during the tenure of this policy.

Consumers are allowed to charge their vehicles under their current electric tariff, except for the agricultural sector. These benefits are also extended to manufacturers. The benefits will be an addition to the FAME II scheme meted out by the Centre.

The policy lists the state port and transport department as the nodal department for planning, implementation and review. The charging infrastructure will be overseen by the energy and petrochemicals department. Gujarat Energy Research & Management Institute (GERMI) will be responsible for research, training and incubation under this policy.

The state of Gujarat has the highest adoption of battery-operated two-wheelers in the country. The policy sends clear market signals to advance EV policies for both supply and demand as well as keep up with market trends nationally and globally. The EV market and related industries, such as batteries, would reap the economic, environmental and societal benefits as part of and following with Covid-19 economic recovery.

Speaking on the policy, Nagesh Basavanhalli, Director, Ampere Vehicles, iterated, "Gujarat Electric Vehicle Policy 2021 is a big step forward for EV manufacturers and consumers. It not only aims to reduce carbon emissions but also encourages young entrepreneurs to venture into the field of electric mobility. By giving an exciting opportunity to set up charging stations at petrol pumps, the government is enhancing the #EV infrastructure in a big way. At Ampere Electric, we're thrilled to see such initiatives to address charging infrastructure concerns. Adding more relevance with the exemptions and subsidies as announced, Gujarat Government is painting a bright future for cleantech mobility and last-mile connectivity."

“With the announcement of the e-vehicle policy the Gujarat government is enabling the inevitable transition from carbon-emitting vehicles to cleaner forms of transportation. The Gujarat Electric Vehicle Policy 2021 comes at an opportune time when both central and state governments are taking encouraging steps to boost awareness as well as the adoption of EVs. The various incentives coming from the government are encouraging for all the industry stakeholders and will, in turn, be a big step towards accelerating this transition,” said Nakul Kukar, Founder and CEO of Cell Propulsion.

“At Cell Propulsion, we see a huge potential in developing electric commercial vehicles. We anticipate such encouraging announcements for the commercial vehicle segment as well. The approval for the establishment of charging stations at the petrol pumps is a huge boost for the industry and we are certain that it will pave the way for faster adoption of EVs across the country,” added Kukar.

Gujarat has emerged as an investment destination for major automobile players. The state is on course to becoming India’s leading auto hub in the next few years and presents tremendous opportunities in automobile and component manufacturing. Gujarat is uniquely poised to leverage its strength as a growing auto hub in the global shift towards EVs.

Electric vehicle registration in the state has already registered an increase of 27 percent in a little less than six months as compared to 2020. According to data available on Parivahan, registration in the state has been increasing since 2017. In the past five years, it has risen eight-fold. The state only had 176 electric vehicles in 2017, but the number has increased to 1,423 in 2021.

However, not all EVs have benefitted from the new policy, particularly those that fall in the high-end price bracket (anything above INR 15 lakh for four-wheelers).

Gujarat joins Delhi, Maharashtra, Kerala and Bihar in the list of states that have offered subsidies. However, at INR 10,000 per kWh, the subsidy offered by Gujarat is the highest for any state. While it’s unclear if any other states are likely to top this figure, several other states are yet to reach the lofty targets they’ve set for themselves. Andhra Pradesh aims to establish one lakh fast-charging stations by 2024 and reimburse EV owners of registration and road tax fees by the same year. Himachal Pradesh eyes for a 100 percent transition to EVs, but by 2030. Karnataka aims to achieve 100 percent e-mobility in auto-rickshaws, cab aggregators, corporate fleets and school buses by 2030. (MT)

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