Review of State EV Plans Across India Amidst COVID-19

Co-Authored with Jessica Korsh

In New Delhi and northern India, air pollution dropped to a 20-year low during the nationwide COVID-19 lockdown. Lockdown is not a sustainable solution to fighting air pollution, but a transition to cleaner electric mobility is. Over 10 states have been committing to electric vehicle (EV) policies to reduce air pollution from the transport sector, which contributes significantly to deadly air pollution in India.

Nearly two-thirds of deaths from ambient air pollution can be attributed to diesel vehicle exhaust emissions in India. Emerging research shows that exposure to higher air pollution can increase the COVID-19 death rate. While the national government’s programs send a signal for cleaner transportation policies, adoption is falling far short of its targets. It is up to the states to implement, strengthen, and tailor plans to grow local EV markets.  

Over ten states in India have final or draft EV policies that support the national electric mobility policies. The states with approved EV policies include: Andhra Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, New Delhi, Tamil Nadu, Telangana, Uttarakhand and Uttar Pradesh. The states with draft policies include: Bihar, Gujarat, Himachal Pradesh and Punjab.

Highlights from State EV Policies

Nearly all the state EV policies prioritize 2- and 3-wheelers, public transportation, and job creation. However, the policies differ in terms of targets, supply side incentives (manufacturing), and demand side incentives (consumer and charging infrastructure investments).

Here is a summary of the EV policies: 

Andhra Pradesh (approved June 2018)

• Aims to have 1,000,000 EVs on the road by 2024.
• Complete reimbursement of road tax and registration fees on sale of EVs until 2024.
• Replace public transport buses in four cities to e-buses by 2024 and across the state by 2030.
• Establish one lakh (100,000) slow and fast charging stations by 2024.
• Celebrate “green days” to create awareness among public.

Bihar (drafted June 2019, awaiting approval)

• Prioritizes electrification of rickshaws and plans to convert all paddle rickshaws to e-rickshaws by 2022.
• Provides subsidies of INR 12,000 ($163) to the end-user, and an additional special incentive of INR 10,000 ($136) will be provided for lithium-ion battery e-rickshaw.
• Promotes the manufacturing of e-rickshaws.
• Set up fast-charging stations at intervals of 50 km on state and national highways, and charging stations at commercial and residential locations.

Gujarat (drafted September 2019, awaiting approval)

• Aims to have 100,000 EVs on the road by 2022, which includes 80,000 2-wheelers or scooters,14,000 3-wheelers, 4,500 cars, and 1,500 buses.
• One hundred percent exemption from registration fee and 50% exemption from motor vehicle tax.
• One hundred percent exemption from electricity duty for EV charging stations.
• Provide additional state-level subsidy to supplement the national-level Faster Adoption and Manufacturing of Hybrid and EV (FAME) II scheme.
• State policy to match the number of charging stations allocated by Department of Heavy Industry (DHI), as well as the subsidy provided under FAME II scheme.

Himachal Pradesh (drafted September 2019, awaiting approval)

• Aims for a 100% transition to EVs by 2030.
• Encourages the use of hybrid EVs by government entities during the transition.
• Promote the creation of a dedicated charging infrastructure, develop a model for private players, and include a provision for charging spots in commercial buildings.

Karnataka (approved September 2017)

• Aims to achieve 100% e-mobility in auto-rickshaws, cab aggregators, corporate fleets, and school buses/vans by 2030.
• Local public transport bus fleets will introduce 1,000 EV buses.
• Providing incentives such as interest-free loans on the net state goods and service tax for EV manufacturing enterprises.
• Focus on a venture capital fund for e-mobility start-ups, and the creation of a secondary market for batteries.
• Set up 112 EV charging stations in Bengaluru.

Kerala (approved March 2019)

• Aims to put one million EV units on the road by 2022 and 6,000 e-buses in public transport by 2025.
• Incentives, such as state tax breaks, road-tax exemptions, toll-charge exemption, free permits for fleet drivers and free parking.
• Viability gap funding for e-buses and government fleets.
• Prioritizes EV component manufacturing.
• Create e-mobility demonstration hubs in a few potential areas such as tourist villages, technology hubs, and major cities’ central business districts.

Madhya Pradesh (approved October 2019)

• Rapid EV adoption and contribution to 25% of all new public transport vehicle registrations by 2026.
• Shared e-rickshaws and electric auto-rickshaws incentives: free cost of permits, exempt/reimbursement from road tax/vehicle registration fees for five years, 100% wavier on parking chargers at any municipal corporation run parking facility for five years.
• Some cities will stop registering new internal combustion engine (ICE) autos.
• Ensure a safe, reliable and affordable charging infrastructure, and promote renewable energy usage in the charging infrastructure.

Maharashtra (approved February 2018)

• Increase the number of registered EVs to 500,000 over the policy period.
• Generate an investment of INR 25,000 crores ($3.4 million) in EV and component manufacturing and create jobs for 100,000 people. 
• Exempts EVs from road tax and registration fees over five-year policy period.
• Enable fuel stations to set up charging points through governing regulations.
• Support for charging infrastructure by planning authorities and electricity supply agencies.
• Incentives for micro, small and medium enterprises and large manufacturing units.
• Modifies building/property rules to help establish a robust public charging infrastructure in the state.

New Delhi (approved August 2020)

• Seeks that EVs account for 25% of the total new vehicle registrations in the city by 2024.
• Aims to have at least 50% e-buses for all new stage carriage buses procured for the city fleet, starting with 1,000 e-buses by 2020.
• A purchase incentive of INR 10,000 ($136) per kWh of battery capacity provided for electric 4-wheelers (cars) (subject to a maximum incentive of INR 1.5 lakh ($2,039) per vehicle) for the first 1,000 e-cars registered in New Delhi after issuance of the policy.
• A purchase incentive of INR 5,000 ($68) per kWh of battery capacity provided for 2-wheelers and subject to a maximum incentive of INR 30,000 ($409) per vehicle.
• Incentive for scrapping and de-registering old highly polluting 2-wheelers.
• Purchase incentive of INR 30,000 ($409) per vehicle to owners of e-autos, e-rickshaws, and e-carts.

Punjab (drafted November 2019, awaiting approval)

• Aim to have 25% of annual vehicle registrations as EVs in the last year of the five-year policy period.
• Aims to increase the share of electric 2-wheelers to reach 25% of new sales over the policy period.
• Replace 25% of the bus fleet of the transport department with e-buses (presently about 90% of bus fleet runs on diesel).
• Aims to increase the share of e-taxis to reach 25% of new sales over the policy duration period (presently almost 80% of registered taxis are diesel based).
• Private EVs will be given 100% waiver on motor vehicle tax for a period of five years, while commercial vehicles will be exempted from registration as well as permit fee for the same period.

Tamil Nadu (approved September 2019)

• Electrify 5% of buses every year by 2030, and substantially convert shared mobility fleets, institutional vehicles, and e-commerce delivery and logistics vehicles to EVs by 2030.
• Convert all auto rickshaws in six major cities to electric vehicles within a span of 10 years.
• Establish a venture capital and business incubation service to encourage EV start-ups.
• Re-skilling allowance for employees working with EV manufacturing units.
• EV-related and charging infrastructure manufacturing units will receive 100% exemption on electricity tax through 2025.

Telangana (cabinet approval August 2020)

• Aims to have EV sales targets for 2025 to achieve 80% 2- and 3-wheelers (motorcycles, scooters, auto-rickshaws), 70% commercial cars (ride-hailing companies, such as Ola and Uber), 40% buses, 30% private cars, 15% electrification of all vehicles.
• Create jobs for 20,000 workers by 2025 through EVs in shared mobility, charging infrastructure development and EV manufacturing activities.
• Attracting investments worth $3.0 billion and support for charging infrastructure deployment.

Uttarakhand (approved October 2018)

• Aims for 100% electrification of public transport, including e-buses, shared mobility including e-bikes, e-taxis, and goods transport using electric 2-, 3-, and 4-wheelers, and other mini goods transport vehicles in five priority cities by 2030.
• Exempts the first 100,000 EV buyers from motor vehicles tax for five years.
• Fiscal incentive on the EV production front includes Employee Provident Fund reimbursement.
• Manufacturing-focused policy and incentivize the manufacturing of lithium batteries with high mileage.

Uttar Pradesh (approved August 2019)

• Roll out nearly 10 lakh (one million) EVs combined across all segment of vehicles by 2024.
• Launch 1,000 electric buses and achieve 70% EV public transportation on identified green routes in identified ten EV cities by 2030.
• Phase out all conventional commercial fleets and logistics vehicles and achieve 50% EV mobility in goods transportation in identified ten EV cities by 2024 and all cities by 2030.
• Establishes single-window system in place for all approvals required for EV and battery manufacturing units.
• Encourage new apartments, high-rise buildings and technology parks to make provision for EV charging infrastructure.
• Aims to be a research and development hub for EVs by focusing on the next generation of battery management systems, from production to disposal.
• Work with universities and colleges to promote more research and development in e-mobility.

The COVID-19 economic downturn and related stimulus needed to rebuild in India present an opportunity to support the automotive industry through investment in electric mobility, especially electric vehicle charging infrastructure. Investing in electric mobility at the national and state level, as part of the economic recovery, will help achieve India’s goals to create jobs, reduce air pollution, and combat climate change. 

Jessica Korsh works with NRDC India team on climate change and is former Duke Stanback Fellow.

This piece originally appeared in the Economic Times Energy Section: https://energy.economictimes.indiatimes.com/news/power/opinion-review-of-state-ev-plans-across-india-amidst-covid-19/78201363