Electrification of Three Wheelers Via Retrofitting: The Telangana Case Study

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To streamline retrofitting of ICE autos to electric, the state should prioritise fiscal incentives, streamline state processes, facilitate affordable financing, and address regulatory challenges

Surging ahead on its e-mobility journey, India has surpassed China to become the biggest market of electric three-wheelers globally, recording a sales figure of over 5,80,000 in 2023. But India’s success story seems to have just started. Reports project e-auto sales in the country to reach 1,80,000 units per month by December 2030.

But a daunting task lies ahead as the majority of the auto rickshaws plying across India currently still run on Internal Combustion Engines (ICE) or use hybrid combinations, making it crucial to fast track their transition to electric. However, rising urbanisation and the search for sustainable transport solutions, have made state governments think out of the box and come out with transformative solutions to enable this switch and reduce emissions.

Apart from pushing adoption of e-autos, the Telangana government has also come out with an innovative initiative that puts forward the vision of transforming these auto rickshaws to electric vehicles through retrofitting, thus switching from having emission heavy vehicles to eco-friendly and cost-effective mode of transportation. Let us take a closer look at the comprehensive framework developed by the state, explore its key highlights and look at the path ahead to further strengthen the initiative.

An analysis of the state government’s initiative done by Natural Resources Defense Council (NRDC) found that the total number of vehicles in Telangana exceeds 16 million – both conventional and electric vehicles, as on November 30, 2023, with auto rickshaws constituting 3% of it. Out of the total registered vehicles, there are 1,07,078 electric light-duty vehicles. Of all auto rickshaw registrations recorded in Telangana between 2019 and 2023, merely 0.92% are electric -powered, it found.

These autos run on various fuel types – starting from petrol, diesel, CNG, LPG, and battery to hybrid combinations such as CNG-petrol, petrol-electric, and petrol-LPG, as well as diesel-LPG. The Telangana government has come out with comprehensive guidelines for the implementation of its EV policy which spells out roles retrofitment of these autos by the state’s Road Transport Authority.

Fig 1: An auto emitting smoke in Hyderabad Photo | Sri Loganathan Velmurugan, EPS

What is Process of Retrofitting a Vehicle in Telangana

Retrofit kit manufacturers: According to the state government’s guidelines, those manufacturing these kits need to register with the Transport department by submitting a “type approval” certificate from an authorised testing agency. Once that is done, they can log on to the Citizen Friendly Services Telangana (CFST) portal to enter the inventory details, the analysis said.
Owner of Auto Rickshaws: Those wanting to retrofit their ICE autos have to present their vehicles to the transport department once the kit is fitted for inspection. Following the inspection, officials select the apt make and serial number from the CFST portal master list and issue a new registration certificate with the same number but with a green number plate.
Acquiring Permits: There are no fixed numbers on the number of ICE autos undergoing retrofitting with the Greater Hyderabad Municipal Corporation (GHMC) limits. But only the initial 250 retrofitted autos within GHMC limits are eligible for incentives provided by the government.

Fig 2: A battery retrofitted auto by RACEnergy. (Photo: Siasat)

Retrofitting of Auto Rickshaws: The Future Outlook for Telangana

The analysis stressed that Telangana State Renewable Energy Development Corporation (TSREDCO) can play a central role in overseeing the implementation of various pilots. Some key measures highlighted by the analysis to operationalise such pilots include:

Strict empanelment criteria: The analysis calls for collaboration between TSREDCO and the RTA to come out with strict criteria for empanelment to ensure smooth after-sales services for auto drivers, that include mandatory warranty provision by providers for a fixed term.
Tenders: TSREDCO can take the competitive tender route to procure kits from OEMS to ensure transparency and ensure healthy market competition. This will also help TSREDCO reduce the cost, found the analysis.
Exploring Finance Options/Subsidies: The current Rs 15,000 subsidy that is mandatorily provided for retrofitment of autos can be increased to rs 25,000, thus reducing upfront cost and encouraging auto owners to undergo this transition. Further collaboration with financial institutions for affordable financing can also be explored, the analysis recommended.
Collaboration between Battery Swapping providers and OEMs: Such collaborations can help bring down the upfront cost associated with fixed battery models, it noted.

Sr. No	Vehicle segment	Incentive available	Number of vehicles to be incentivised	Maximum incentive per vehicle
1	e-2W (L1 & L2)	INR 5000/kwh	1,00,000	10,000
2	e-3W autos (L5M)	INR 5000/kwh	15,000	30,000
3	e-3W goods carrier (L5N)	INR 5000/kwh	10,000	30,000
4	e-4W cars (M1)	INR 5000/kwh	10,000	1,50,000
5	e-4W goods carrier (N1)	INR 5000/kwh	10,000	1,00,000
6	e-buses* (SRTu)	10% vehicle cos (ex factory)	1000	20,00,000

Road Tax / Vehicle Registration Fees	Manufactured within the State	Manufactured outside the State
Exemption on Road Tax	100% exemption for first 10,000 buyers 75% exemption for 10,001-15000 buyers 25 % exemption after 15000 buyers upto policy period	25% upto policy period
Exemption from Vehicle Registration Fees	100% exemption for first 10,000 buyers 75% exemption for 10,001-15000 buyers 25 % exemption after 15000 buyers upto policy period	25% upto policy period

S No	Type of PCS/SPCS	Incentive amount	Maximum Incentive available per PCS/SPCS	Max number of PCS/SPCS to be incentivised
1	Slow	60% of the cost	INR 10,000	15,000
2	Moderate/Fast	50% of the cost	INR 5,00,000	500
3	Solar Based fast#	70% of the cost	INR 7,00,000	500

Type of Unit	Max Limit	Max Admissible Subsidy
Micro	30% of FCI	Rs 2 Cr
Small		Rs 7 Cr
Medium		Rs 15 Cr
Non MSME		Rs 30 Cr

Sr No	Vehicle Segment	Incentives
1	Assured Buyback,	6% of total vehicle cost capped at INR 10,000/-
2	Battery warranty of at least 5 years	4% of total vehicle cost capped at INR 6,000/-

Electrification of Three Wheelers Via Retrofitting: The Telangana Case Study

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5 kWh

Vehicle Category	Incentive	Maximum Incentive	Number of Electric Vehicles to be incentivized
e-Bicycle	Upfront: 25% of Cost of Bicycle	Rs. 3,000	First 25,000 Bicycle purchased during the policy period
e-2W	Upfront : Fixed Battery: Rs. 5,000/kWh Swappable Battery: Rs. 3000/kWh Scrapping : Rs 5,000	Rs. 30,000 Rs. 15,000 Rs. 5,000	First 10,000 vehicles registered during the policy period
e-Cart	Upfront : Fixed Battery: Rs. 5000/kWh Swappable Battery: Rs. 3000/kWh Retrofit Kit: 15% of cost	Rs. 30,000 Rs. 10,000 Rs.10,000	First 1000 e-Carts registered during the policy period
e-Autos	Upfront : Fixed Battery: Rs. 5000/kWh Swappable Battery: Rs. 3000/kWh Retrofit Kit: 15% of cost Scrapping : Rs 7,500	Rs. 30,000 Rs. 15,000 Rs. 15,000 Rs. 7,500	First 1000 e-Autos registered during the policy period
e-Goods Carrier L5N	Upfront : Fixed Battery: Rs. 5000/kWh Retrofit Kit: 15% of cost Scrapping: 15,000	Rs. 50,000 Rs. 15,000 Rs. 15,000	First 1000 Goods Carrier L5N registered during the policy period
e-Goods Carrier N1	Upfront: Fixed Battery: Rs. 5000/kWh Retrofit Kit: 15% of cost Scrapping: 15,000	Rs. 80,000 Rs. 25,000 Rs. 15,000	First 1000 Goods Carrier N1 registered during the policy period
4 W- e-Cars (Personal)	Upfront: Fixed Battery: Rs. 5,000/kWh Scrapping: 7000	Rs. 1,50,000 Rs. 7,000	First 2000, 4 W- e-Cars (Personal) (including Hybrids as defined in FAME II) registered during the policy period. Applicable only for vehicles with ex showroom price below INR 20 lakhs
4 W- e-Cars (Commercial)	Upfront: Fixed Battery: Rs. 10,000/kWh Scrapping: 7000	Rs. 2,00,000 Rs. 7,000	First 1000, 4 W- e-Cars (Commercial) (including Hybrids as defined in FAME II) registered during the policy period

Vehicle Category	Early Bird Incentive	Maximum Early Bird Incentive
e-Bicycle	Rs. 2000	Rs. 2,000
e-2W, e-Cart, e-Autos, e Goods Carrier (L5N and N1), e-4W (personal & commercial)	Rs 3,500/kWh	Rs. 50,000

Category	Incentive	Maximum Incentive
Private Charging	Infrastructure Incentive: Grant on purchase and installation of charging equipment	Rs. 6,000	Only for the first 30,000 private chargers installed during the policy period.
Public Charging	Reimbursement of GST paid 100% reimbursement of GST paid on the Fast Charging/Swapping Electric Vehicle Supply Equipment (EVSE) procured by private enterprises/individual	Rs. 50,000	Only for the first 50 fast charging /Swapping EVSE installed during the policy period. (Will not be applicable on Chargers under Central Subsidy)
	Upfront electricity infrastructure: Upfront cost on infrastructure for bringing power supply to Electric Vehicle Charging Station	Rs. 5,00,000	Only for the first 50 Public fast Charging/Swapping Stations installed in the state during the policy period. (Will not be applicable on Chargers under Central Subsidy)
	Electricity Duty Exemption: 100% Electricity duty exemption for Public Charging and Swapping stations	For policy period	For policy period

Sr. No	Classification of EV	2022-23	2023-24	2024-25	2025-26	2026-27	Total
1	2W	2,000	8000	20,000	54,000	85,000	1,69,000
2	3W	200	800	2000	4,000	10,000	17,000
3	4W(Non Commercial)	100	400	1400	3,000	7,000	12,000
4	4W(Commercial)	10	40	100	300	650	1,100
5	Buses	10	25	65	200	600	900
	Total						2,00,000

Sr No	Vehicle segment	Ceiling for Early Bird	2023 – 2027
1	2W	35	172
2	3W(E-Rickshaw/ E-Cart)	10	40
3	3W	10	40
4	Car(Including Taxis)	40	167
5	Bus	11	49
6	E-4w ([CV, Stage Carriage/Maxi Cabs)	10	41
Total	–	116	509

Sr No	Vehicle Segment	Subsidy (Whichever Is Lower)	Maximum ExShowroom Price to Avail (INR)
1	Two-Wheeler	10% of the Ex-Showroom Price or INR 15,000	1,50,000
2	Three-Wheeler – e Rickshaw / e-cart	10% of the Ex-Showroom Price or INR 30,000	3,00,000
3	Three-Wheeler	10% of the Ex-Showroom Price or INR 50,000	5,00,000
4	Car	10% of the Ex-Showroom Price or INR 2,50,000	25,00,000
5	Bus	25% of the Ex-Showroom Price or INR 50,00,000	2,00,00,000
6	E-4w ([CV, Stage Carriage/Maxi Cabs)	10% of the Ex-Showroom Price or INR 3,00,000	30,00,000

Sr No	Vehicle Segment	Subsidy (Whichever Is Lower)	Maximum ExShowroom Price to Avail (INR)	No of EVs to be subsdised
1	Two-Wheeler	20% of the Ex-Showroom Price or INR 60,000	1,50,000	28
2	Three-Wheeler – e Rickshaw / e-cart	20% of the Ex-Showroom Price or INR 60,000	3,00,000	10
3	Three-Wheeler	20% of the Ex-Showroom Price or INR 1,00,000	5,00,000	10
4	Car	20% of the Ex-Showroom Price or INR 5,00,000	25,00,000	33
5	Bus	50% of the Ex-Showroom Price or INR 1,00,00,000	2,00,00,000	11
6	E-4w ([CV, Stage Carriage/Maxi Cabs)	20% of the Ex-Showroom Price or INR 6,00,000	30,00,000	9
Total				101

Sr No	Vehicle segment	Number of EVs	State subsidy
1	2W	100	Rs.10,000/- per Kwh of battery capacity subject to a maximum of Rs.30,000/- per vehicle.
2	3W	50	Rs.10,000/- per Kwh of battery capacity subject to a maximum of Rs.50,000/- per vehicle.
3	4W	50	Rs.10,000/- per Kwh of battery capacity subject to a maximum of Rs.2,00,000/- per vehicle

Sr. No	Owner of PCS	Subsidy
1	Retail Outlet of Oil Marketing Companies	15% of the cost of putting up Public Charging Infrastructures and Stations will be reimbursed by the State Govt. in the form of subsidy/ incentive.
2	Local Entrepreneurs	25% of the cost of putting up Public Charging Infrastructures and Stations will be reimbursed by the State Govt. in the form of subsidy/ incentive

Category of vehicle	% Of subsidy	The maximum amount of subsidy
Electric Two-wheelers	15%	Rs. 5000/-
Electric Three-wheelers	15%	Rs.12,000/-
Electric Four Wheelers	15%	Rs. 1,00,000/-

Criteria	Threshold Value
Min. top speed	40km/hour
Min. acceleration	0.65m/s2
Max. electric energy consumption	Not exceeding 7kWh/ 100km
Warranty	At least 3 years comprehensive warranty including that of battery from the manufacturer

Criteria	Threshold value
Min. top speed	40 km/hr
Min. acceleration	0.65 m/s2
Max. electric energy consumption Not exceeding	7 kWh/100km
Warranty	At least 3 years comprehensive warranty including that of battery from the manufacturer

EV Segment	Demand Incentives
Electric 2-wheeler	Purchase incentive of Rs. 5,000/- per kWh of battery capacity; Maximum incentive of Rs. 30,000/- per vehicle Incentive for scrapping and de-registering old ICE two wheelers registered in Delhi: Up to Rs. 5,000/- of the incentive shall be reimbursed by the GNCTD All delivery service providers shall be expected to convert 50% of their fleet operating in Delhi to electric by 3V March, 2023 and 100% by 31st March, 2025.
E-Autos	Open permit system shall be applicable & be given on first-come-first-serve basis; no cap on permits issued to e-autos in Delhi Purchase Incentive of Rs. 30,000/- per vehicle shall be provided by GNCTD Interest subvention of 5% on loans and/or hire purchase scheme for the purchase of an e-auto Incentive for scrapping and de-registering old ICE auto rickshaws registered in Delhi: Up to Rs. 7,500/- of the incentive shall be reimbursed by the GNCTD The auto-rickshaw permits linked to the de-registered ICE vehicle can be surrendered and exchanged for an e-auto permit at no additional cost.
E-rickshaws & E-carts	Purchase Incentive of Rs. 30,000/- per vehicle shall be provided by GNCTD Interest subvention of 5% on loans and/or hire purchase schemes Buses
E-buses	Pure electric buses shall constitute at least 50% of all new stage-carriage buses (i.e., for all public transport vehicles with 15 seats or more) procured for the city fleet including for last-mile connectivity Induction of 1000 pure electric buses by 2020
Goods Carriers	A Purchase Incentive of Rs. 30,000/- to the first 10,000 e-Carriers to be registered in Delhi after the issuance of this policy. Interest subvention of 5% on loans and/or hire purchase schemes. Incentive for scrapping and de-registering old ICE goods carriers registered in Delhi: Up to Rs. 7,500/- of the Incentive shall be reimbursed by the GNCTD Goods carriers (i.e., L5N and N1 type)
Four wheeler	Purchase Incentive of Rs. 10,000/- per kWh of battery capacity Maximum incentive of Rs. 1,50,000/- per vehicle to the registered owners of the first 1000 e-cars to be registered in Delhi after the issuance of this policy

Vehicle Segment	Max vehicle to be supported	Approx. battery size	Approx incentive @10,000 per kWh
Electric 2 wheeler	24,000	2 kWh	20,000/-
Electric 3 wheeler	70,000	5 kWh	50,000/-
Electric 4 wheeler	4000	15 kWh	150,000/-
4 wheeler (SHEV)	1000	1.3 kwh	13,000/-
Electric bus	1000	250 kwh	25,00,000/-

Vehicle Segment	Incentive Available ( INR)	No. of Vehicles to be Incentivized	Maximum Incentive per Vehicle (INR)
Electric Two Wheeler (L1 & L2)	5000/kwh	1,00,000	10,000
Electric 3 Wheeler autos (L5M)	5000/kwh	15,000	30,000
Electric 3 Wheeler goods carrier (L5N)	5000/kwh	10,000	30,000
Electric 4 Wheeler cars (M1)	5000/kwh	10,000	1,50,000
Electric 4 Wheeler goods carrier (N1)	5000/kwh	10,000	1,00,000
Electric buses	10% of vehicle Cost	1,000	20,00,000

Vehicle Segment	Scrappage Incentive
Electric Two-Wheeler	INR 7,000
Electric Three-Wheeler	INR 15,000
Electric Four Wheeler	INR 25,000

Incentives Description	Incentives
Assured Buyback	6% of total vehicle cost capped at INR 10,000/-
Battery warranty of at least 5 years	4% of total vehicle cost capped at INR 6,000/-

CHARGING STATION	Incentive
Small Charging Stations	Capital Subsidy of 25% of the value of the charging equipment/machinery for first 300 charging stations up to a Maximum subsidy of INR 1,50,000
Medium Charging Stations	Capital Subsidy of 25% of the value of the charging equipment/machinery for the first 100 stations up to a Maximum subsidy of INR 2,00,000.
Large Charging Stations	Capital Subsidy of 25% of the value of the charging equipment/machinery for the first 100 stations up to a Maximum subsidy of INR 10,00,000.

Vehicle Segment	State Subsidy Amount (in Rs.)	Max ex-factory price to avail incentive (in Rs.)
2 wheeler	Rs. 10,000/- per kWh	1,.50,000
3 wheeler	Rs. 10,000/- per kWh	5,00,000
4-Wheeler	Rs. 10,000/- per kWh	15,00,000

Vehicle Segment	Battery Size in KWH (approx.)	State Subsidy Amount(Rs.)	Total State Subsidy (Rs.)	Maximum ex-factory price to avail incentive (Rs.)
Electric Two wheeler	2 KWH	10000/- per kWh	20000/-	1,50,000
Electric Three wheeler	5 KWH	10000/- per kWh	50000/-	5,00,000
Electric Four wheeler	15 KWH	10000/- per kWh	150000/-	15,00,000