Accelerating EV Adoption: The Madhya Pradesh Case Study

The state’s revamped EV policy proposes a comprehensive strategy for accelerating e-mobility adoption across vehicle segments while providing strong financial incentives and infrastructure support

India has been making significant strides in pursuing its clean mobility ambitions by actively promoting electric vehicles through continued policy support, infrastructure development, and incentives. Initiatives like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme and the Production Linked Incentive (PLI) program have helped ratchet up EV adoption. For successful implementation of these goals, state governments play a critical role in crafting localized policies tailored to their unique transportation needs.

Various state governments have already put in place robust policy measures to accelerate this transition and have been instrumental in promoting EVs by offering subsidies, and setting up ambitious targets. Efforts from states include tax exemptions, scrappage incentives, among others. Madhya Pradesh is one such state which has been at the forefront of promoting electric vehicles, coming out with a comprehensive EV policy in 2019.

The outcome of that policy has shown a remarkable CAGR of 88.6% from FY 2018-19 to FY 2023-24, resulting in a cumulative registration of more than 1.48 Lakh EVs within the state. Now, the state has come up with its draft EV policy 2.0 that provides a comprehensive strategy for accelerating electric mobility adoption across vehicle segments while providing strong financial incentives and infrastructure support.

The Indian EV industry is projected to grow at a CAGR of 49% between 2022 and 2030, with 10 million annual sales by 2030. The EV industry is also projected to create around 50 million direct and indirect jobs by 2030. Keeping this in mind, Madhya Pradesh has been actively striving to boost the adoption of EVs, aligning with the central government’s broader goals, and aiming to position itself as the EV manufacturing hub of India.

Electric Vehicle Adoption In Madhya Pradesh: An Overview

According to Clean Mobility Shift’s EV dashboard, The state has achieved robust electric vehicle adoption numbers, selling a total of 1,83,910 units between CY 2019 TO 2024 and achieving a penetration rate of 2.19% (combined). In 2024 alone, around 62,597 units were sold, achieving a penetration rate of 3.84% (combined). It sold 31,051 e-two-wheelers, 29,780 e-three wheelers and 1,484 e-four-wheelers.

If one takes the figures from from CY2019 to 2024, the state sold 69,366 E3Ws, 3,717 e-four wheelers, and 159 units of e-buses. The new policy aims to facilitate the widespread adoption of electric vehicles across multiple segments, with a strong focus on commercial fleet transition, heavy-duty vehicles, and EV manufacturing incentives.

Fig 1: Electric two-wheelers running on lead acid batteries have proliferated across Indian cities (Photo by Petr Svarc / Alamy)

Madhya Pradesh EV Policy 2.0 - Key Takeaways

The new policy proposes to provide support mechanisms for fleet operators to transition their commercial vehicles to EVs to reduce emissions while also prioritising the swift adoption of electric vehicles in the heavy-duty segment, such as buses, trucks and tractors owing to their significant contribution to emissions. The policy proposes to position Madhya Pradesh as a highly attractive destination for establishing electric vehicle and EV component manufacturing facilities, through contemporary Industrial Promotion Policy.

The policy also proposes to launch an online portal called ‘EV Tarang’ that will serve as a one-stop resource for all matters related to EVs in Madhya Pradesh. “This portal will offer comprehensive information on incentives available under the policy, tools for comparing EVs with traditional internal combustion engine (ICE) counterparts and guidance on availing incentives,” the policy said, adding that it also proposes to designate Bhopal, Indore, Jabalpur, Gwalior and Ujjain as model EV cities implementing detailed plans for electrifying their intra-city public bus fleets.

While the revamped policy proposes to create new employment opportunities by promoting EV manufacturing, charging infrastructure development and the use of EVs in both public and private transportation, it also includes plans for introducing EV and EV component-related courses in ITIs and engineering colleges to equip the workforce with the skills necessary for the EV industry.

Policy Targets and Incentives

In the e-two wheeler section, the new policy proposes to achieve 40% of all new registrations by the end of the policy period while it aims for 100% of all new registrations in the commercial fleet in the same time frame. In the electric three-wheeler segment, it aims to achieve 80% of all new registrations by the end of the policy period in both passenger and freight segments while it has set a target of reaching 15% of all new registrations in the e-four wheelers section.

To boost adoption, the policy also aims to provide incentives. In the e-2W, 3W and  E-LCV segment, it proposes 100% motor vehicle tax and registration fee exemption till 1st year of policy implementation while for retrofitting, it also proposes a 100% motor vehicle tax and registration fee exemption on e-car with ex-factory price up to Rs 20 lakh. The policy also proposes to provide capital subsidy with an upper cap of Rs 10,000 for 2W, Rs 20,000 for e-three wheelers, Rs 50,000 for e-cars and Rs 10,00,000 for e-buses.

For small charging stations, the new policy proposes “capital subsidy of 25% of the value of the charging equipment/machinery for the first 300 charging stations up to a maximum subsidy of Rs 1,50,000, while for medium charging stations, it proposes a “capital subsidy of 25% of the value of the charging equipment/machinery for first 100 stations up to a maximum subsidy of Rs 3,00,000.”