An image uploaded to Strapi
The Redesigned Electric Vehicle Policy in Uttar Pradesh
October 31st, 2022

Image Source: Google

The state government recently rolled out the new Electric Vehicle Manufacturing and Mobility Policy 2022 to promote the shift to green mobility and create a conducive ecosystem for Electric Vehicles (EVs) in Uttar Pradesh (UP), and along with this, the FAME II incentives will continue to be in existence.

Potential of the Upgraded EV Policy:

The current prime focus of the government is not only to reduce carbon footprint but also to create a global hub for manufacturing EVs and their components within the state itself. The policy essentially follows a trifurcated incentive approach including benefits to consumers for purchasing EVs; to manufacturers of EVs, batteries, and other related equipment; and to utility providers providing charging or swapping facilities. 

The revamped policy, which will be valid for the next 5 years, targets to allure investments of over Rs 30000 crore and direct and indirect job creation for more than 1 million people and discard their migration due to job hunt. It is also going to promote research and innovation in the EV auto market and its components as well.

Another goal the new policy emphasises is to contribute toward the country becoming a trillion-dollar economy, by driving capital through the creation of opportunities and extracting potential in the EV industry, thereby fulfilling India’s Net Zero Emissions target for 2070. Being the hub of tourism in the country, the UP government is going to benefit majorly from the deployment of EVs in the most renowned tourist spots. 

Benefits to Buyers:

Being home to the largest consumer market, the UP government has introduced numerous attractive benefits for buyers in the form of subsidies. 

  • The policy offers a subsidy of 15% on the ex-showroom price of the following:
  • Up to Rs 5000 for e-two-wheelers, the maximum capital expenditure is Rs 100 crore for a maximum of 200000 EVs.
  • Up to Rs 120000 for e-three-wheelers, the maximum budget is Rs 60 crore for a maximum of 50000 EVs. 
  • Up to Rs 1 lakh for passenger EVs, the maximum budget is Rs 250 crore for a maximum of 25000 passenger EVs
  • and up to Rs 20 lakh for e-buses for a maximum limit of max 400 e-buses.
  • A subsidy of 10% will be provided to electric goods carriers, up to Rs 1 lakh each for the first 1000 goods carriers.
  • A complete dispensation from road tax and registration fees for the first three years of the policy window, applicable to EVs purchased and registered in all segments. Additionally, the exemption can be extended for the rest 2 years as well, only if the EV is manufactured, purchased, and registered in UP itself. 
  • If the buyer purchases an EV sans battery, only 50% of the permissible benefit will be offered. 

Government Benefits:

To push the adoption of EVs, Government employees will be encouraged to purchase EVs, advance for which will also be made available by the state government. 

Charging Infrastructure: 

The new policy seeks to foster the spread of charging and battery-swapping facilities in places like metro stations, bus depots, public parking lots, petrol pumps, malls, healthcare centres, corporate offices, and Gram Sabha land, to name a few. To accelerate the process, the following provisions are being provided: 

  •  The first 2000 charging stations will be provided with a capital subsidy of up to Rs 10 Lakh, each on the permitted fixed capital investment 
  • A subsidy of up to Rs 5 lakh each will be entitled to a maximum of 1000 battery swapping stations
  • To intensify the charging and battery-swapping infrastructure in UP, the government is striving to promote the establishment of such stations every 25 km along the Expressways and Highways.
  • The UP government will also aid service providers to develop public charging stations by facilitating land on lease at Re1/kWH in a revenue-sharing model for 10 years.
  • The UP government, in consultation with UP Pollution Control Board, are promoting the set up of collection centres for exhausted batteries and their recycling at dealerships of EVs and battery manufacturers.
  • The charging and battery swapping stations are going to establish facilities for battery disposal. 

Benefits for Manufacturers:

  • The new additions include a variety of capital subsidies for service providers of charging, and battery-swapping facilities and provisions to invite extravagant investments in EVs and battery manufacturing. 
  • The policy will provide a capital subsidy of 30% on investment up to a maximum of 1000 crore, for the first two ultra-mega battery projects, and Rs. 1500 crore or more for the setup of a battery manufacturing station in UP with a minimum production capacity of 1 GWh.
  • The manufacturers can also enjoy complete stamp duty reimbursements applicable to the Integrated EV Project and Ultra Mega Project for creating facilities anywhere in the state, at a rate of 100% in Purvanchal and Bundelkhand region, 75% in Madhyanchal and Pashchimanchal-except Ghaziabad and Gautam Buddh Nagar district, and 50% in Ghaziabad and Gautam Buddh Nagar district for Mega, Large and Ministry of Micro, Small & Medium Enterprises (MSME0 projects. 

What more can be done by the State Government?

  • The state must prepare and present an action plan or a road map encircling the details about timelines, roles, and responsibilities of the agencies related to the implementation of the policy. 
  • It must attenuate the impression of these incentives on the budget by instigating taxes on gas-emitting vehicles and leveraging incentives under the vehicle scrappage policy. 
  • Just like proper subsidies for manufacturing and charging infrastructure of EVs, comprehensive incentives must also be provided to the parking infrastructure; logistics, and service-providing companies on the parking and charging of these EVs, to elevate the EV adoption embraced by B2B sectors.
  • For a quicker switch to EVs, there must be mandatory specified targets declared for fleet electrifications for the B2B segment. 

Summing Up:

The revamped-UP policy for EVs provides bigger subsidies and strives to augment faster adoption of EVs in all sectors. Unlike the previous policy, this new policy reflects a thorough understanding of the subsidies being procured by EVs from different segments. The pivot of the policy is not only on the B2C sector, but it also allows B2B sectors to make investments in EVs and drive toward fleet electrification. The immunity from road tax and registration for EV purchases has surged from 75% to 100%, which can be the ultimate driving force to heavily escalate EV adoption. Doubtlessly, this is a paramount move by the state government to plunge the EV transition.