New incentives aim to bring more electric vehicles to the road over the next three years

Over the last few months, India has seen a spate of policy changes and amendments all aimed at boosting the EV ecosystem in the country. Following the likes of Maharashtra and West Bengal, which have recently announced their updated EV policies, Gujarat on Tuesday became the latest state in the country to do so.

Gujarat’s three-year EV policy aims to support 2 lakh EVs to come on road by 2025, of which close to 50% are two-wheelers and 10% are four-wheelers. Here are the highlights:

Consumer subsidies

  • Two-wheelers can avail upto ₹40,000 discount for an EV with a maximum ex-factory price of ₹1.5 Lakhs.
  • Three-wheelers can avail upto ₹1,00,00 discount for an EV with a maximum ex-factory price of ₹5 Lakhs.
  • Four-wheelers can avail upto ₹3,00,00 discount for an EV with a maximum ex-factory price of Rs ₹Lakhs.
  • All EVs can avail between 50 – 100% exemption pf motor vehicle tax.
  • 100% exemption of registration fee for EVs

This means, a consumer buying a two-wheeler EV like Hero Photo, priced at ₹89,990, can get it for just ₹49,990/- after availing the above subsidies. A four-wheel EV like a TATA Togor XE, priced at ₹12,73,000 will come to ₹9,93,00 for commercial use and ₹11,23,000 for personal use (FAME II subsidy for commercial use only). These sops though have only been planned for the next three years, and would be available only to the first 200,000 EVs on state roads. The state has also capped the maximum subsidy at 40% of the ex-factory price.

Charging infrastructure

  • Eight major state highways connecting cities like Ahmedabad, Vadodara, Surat, Gandhinagar, Jamnagar, Somnath, and Bhavnagar will now have 115 EV charging stations, making it convenient to charge vehicles in long distance drives.
  • Eight cities – Ahmedabad, Vadodara, Surat, Gandhinagar, Jamnagar, Somnath, Junagarh and Bhavnagar – will have 210 EV charging stations.
  • The first 250 commercial public EV charging stations in the state will be eligible for 25% capital subsidy on equipment/machinery (up to ₹10 lakhs per station).
  • Charging stations shall be exempt from paying electricity duty

Manufacturing incentives (to be continued as under under Gujarat Industrial Policy 2020)

  • New industries will get exemption from Electricity Duty for 5 years.
  • Upto 12% of Fixed Capital Investment (FCI) will be given to large industries for setting up manufacturing operations in the state in the form of capital subsidy.
  • This benefit will be given over a period of 10 years subject to annual ceiling of ₹40 Crore.
  • Government will facilitate industries in getting “Government Land” on long term lease upto 50 years (further extendible as per prevailing policy) to industrial enterprises @6% of the market rate.
  • Capital subsidy on loans and interest subvention for MSMEs.

The new policy has been created with one eye on scaling demand for EVs and accelerating adoption, which is a departure from Gujarat’s erstwhile manufacturing-heavy approach to the e-mobility transition. Kevadia town, the site of the Statue of Unity, was declared an EV only zone earlier this month. Gujarat’s new EV push comes hot on the heels of aggressive policies introduced by Maharashtra, West Bengal, and Karnataka (which amended existing policy to make EVs more attractive to end consumers).