Moving Forward with Electric Vehicles in India – Telangana

As part of building back better from the COVID-19 economic downturn in India, the state of Telangana approved its electric vehicle (EV) policy this week. The Telangana policy is one of the most comprehensive EV policies in India. The forward-looking policy includes strong incentives for consumers, manufactures, charging providers and the EV ecosystem. The Telangana EV policy aims to drive investment in the EV market, create jobs, ramp-up shared mobility, decrease air pollution, and help achieve India’s climate goals. NRDC and partners congratulate Telangana cabinet on approving the robust EV policy. 

EV Bus at Hyderabad Airport

Telangana EV Policy Highlights

The mission statement of the Telangana Electric Vehicle and Energy Storage Policy include ambitious EV sales targets for 2025: 

  • 80% two- and three-wheelers (motorcycles, scooters, autorickshaws) 
  • 70% commercial cars (ride-hailing companies, such as Ola and Uber) 
  • 40% buses
  • 30% private cars 
  • 15% electrification of all vehicles

Attracting investments worth $3.0 billion is a key objective of the Telangana EV policy. The policy also aims to create jobs for 20,000 workers by 2025 through EVs in shared mobility, charging infrastructure development and EV manufacturing activities. 

The Telangana EV policy recognizes zero emission vehicles as part of achieving India’s climate goals, improving air quality, and protecting public health from risks, such as heart disease and lung cancer. The EV policy also highlights the anticipated growth in the Indian automobile market, ranging from 10 to 13 million cars alone in 2026, quadrupling from 2.8 million cars in 2016. 

For demand side incentives, the Telangana EV policy is far-reaching. Consistent with the national government’s FAME II Policy, demand incentives are available for electric two-wheelers; three-wheeler; four wheelers and buses. The incentives include up to 100% exemption of road tax and registration fees; purchase subsidies for EV buyers; additional “top-up” incentives up to 50% for swappable batteries; and purchase incentives for the first set vehicles registered. 

For EV charging infrastructure incentives, Telangana commits the government to supporting charging infrastructure deployment in the state. The incentives include: a capital subsidy of 25% of charging equipment for the first 500 fast charging/swapping stations; special power tariff rates for commercial viability of EV charging stations; duty exemption on power tariff to public charging stations for 10 years; and reimbursements up to 75% for private EV charging service providers and fast charging equipment.  

For supply side incentives, the EV policies aims to have Telangana as a forerunner in EV manufacturing and battery storage. The incentives include: EV and EV power train manufacturing and assembly as well as components for EVs, charging infrastructure, and battery storage; capital incentives for plants and machinery as well as “mega” projects the employ over 1,000 people; land and lease rental incentives; tax benefits for goods and service taxes; power subsidies for EV and EV component manufacturing; open access renewable energy systems; exemptions on electricity duties for commercial operations; transportation subsidies for fuel costs; exemptions for registration, transfer and stamp duty; skill development training assistance; and “EV cluster” for a large mega automobile park (similar to solar parks).

Strong Coalition Support for the EV Policy

Just a week before the cabinet approved the EV policy, a diverse group of business, civil society, and academic leaders came together to introduce a coalition letter that supports advancing electric mobility in Telangana. The coalition letter encourages Telangana to release, adopt and implement the draft electric mobility policies, as discussed during a virtual roundtable, “Charging Ahead on Electric Mobility”. 

The coalition letter emphasizes that electric mobility is critical to rebuilding a stronger post-COVID-19 economy in India.

The Telangana coalition letter highlights that investing in the larger automotive and EV market, specifically through strong drivers to rapidly scale-up charging infrastructure, is vital to India’s COVID-19 economic recovery, as well as, to achieve India’s national goals on electric mobility, air quality and climate change. 

A strong set of signatories joined the coalition effort. Mahindra Electric and Tata Motors, two of India’s leading auto companies, signed onto the letter. Energy Efficiency Services Limited (EESL), a leader in charging infrastructure siting, also support the letter. A group of EV industry leaders and startups, including Bounce, Lithium Urban Technologies, Gayam Motor Works, Matter Motor Works, MCS Carger, and Sun Mobility, joined the letter. Industry groups, such as Confederation of Indian Industries (CII)-India Green Building Council (IGBC) and India Energy Storage Alliance (IESA) supported the letter. Leading civil society organizations, clean energy groups, and health experts, including the Administrative Staff College of India (ASCI),  The Climate Group, Climate Trends, Council on Energy, Environment and Water (CEEW) and NRDC signed onto the letter. 

We congratulate the government officials and stakeholders in Telangana in adopting an ambitious policy to advance electric mobility. The Telangana EV policy was years in the making, with early draft in 2017. NRDC and ASCI have been working as knowledge partners to support the state’s electric mobility, environment, and climate goals. Investing in electric mobility, as part of the economic recovery, will help achieve India’s goals to create jobs, reduce air pollution, and combat climate change.

This blog post was updated to include information on the Telangana cabinet approval and the incentives. It is based on media reports and stakeholder discussions.

About the Authors

Anjali Jaiswal

Senior Director, India, International Program

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