Experts believe that the new policy is a ‘timely step’ to address the state’s lagging EV adoption and infrastructure
Backed by powerful advancements in technology and the central government’s enabling initiatives, India’s Electric Vehicle growth story has been burgeoning for the past few years. Equally important is the contribution of states, many of whom have constantly endeavoured to not only smoothen the process of EV adoption but also create the requisite infrastructure and policy enablers that can further encourage more private sector participation and increase the appetite of consumers towards clean mobility solutions.
While many states like Maharashtra and Delhi are leading the way in increasing the adoption of these clean vehicles, many others have realised the importance of making this switch to curb emissions and contribute to the larger goal of helping India achieve its net-zero goals by 2070. Andhra Pradesh is one such state which has been striving to fast track its transition to electric vehicles, realising that the “slow adoption of EVs in the state demands for strong government intervention for creating an integrated ecosystem.”
In this backdrop, the state recently launched the “Andhra Pradesh Sustainable Electric Mobility Policy (4.0) 2024-29 that envisages “to establish Andhra Pradesh as a premier global hub for high-value EV manufacturing in India, through strategic demand and supply initiatives, to nudge towards e-mobility adoption and to promote sustainable end-of-life use practices, with the goal of achieving carbon neutrality (Scope 1 emission) from the transport sector by 2047”.
This is in line with the state’s endeavour of making significant strides towards accelerating the adoption of EVs as part of its vision to create a cleaner, more sustainable transportation ecosystem. The policy provides incentives for Original Equipment Manufacturers (OEMs), consumers and investors, including tax subsidies, and supports the development of critical EV infrastructure. Let us look at the key points highlighted in the policy.
Electric Vehicles in Andhra Pradesh: The Story So Far
According to the policy, Andhra Pradesh has 1.78 crore vehicles across various categories registered as on Nov 2024. This data is provided by the central government’s Vahan Dashboard. Of the total vehicles registered, 1.3 Lakh are Battery Electric Vehicles (BEV), 817 are strong hybrid EVs and the rest are Internal Combustion Engines (ICE) including CNG, petrol/diesel hybrid vehicles.
There are 601 public charging stations operating in the state, indicating an average of one charging station every 205 Km of road length. In addition, the state has three Registered Vehicle Scrapping Facilities receiving little over 1,600 scrap applications including private, government and defence vehicles, says the newly-launched policy. The slow adoption of EVs and the lack of adequate supporting infrastructure like charging and battery swapping stations necessitates the need for boosting the adoption of cleaner vehicles in the state.
Fig 1: People travel on an electric vehicle. Pic credit: Gratzer/LightRocket/Getty Images
Andhra Pradesh’s Electric Vehicle Policy: Objectives and Targets
Apart from de-congesting transportation, the state government also aims to build sustainable clean cities, keeping in mind the rising emissions and its ill-effects on the health of the people. Through the policy, the government not only wants to increase the consumer’s appetite towards these clean vehicles and give a fillip to clean public and shared transport, it also wants to create supporting infrastructure for EVs and promote private sector investment in its development. At the same time, it also wants to build capabilities for next-gen technologies in the automotive industry and promote a circular economy through e-waste recycling.
Keeping in line with this vision, the policy aims to register a minimum of 2 lakh new e two-wheelers, 10,000 new three-wheelers and 20,000 new four-wheelers (BEVs) by 2029 apart from targeting the 100% electrification of the Andhra Pradesh State Road Transport Corporation (APSRTC) fleet. The policy also aims to have a density of one charging station per 30 kms along notified green channels as well as density of one charging station per 3x3 km grids in e-mobility cities. This apart, the government also has the provision of a corpus fund utilization of Rs 500 Cr towards building e-mobility cities while also establishing 100 incubation centers focused on e-mobility startups.
Financial Incentives to Boost EV Adoption
Under the policy, the manufacturers of battery-operated electric vehicles of all registration types, EV components, charging station and related equipment among others will qualify as manufacturers and “new or expansion or diversification projects are eligible for incentives extended to manufacturers,” it states.
“The MSME manufacturers are eligible to claim investment subsidies…. In the form of either 35% of eligible fixed capital investment up to maximum of Rs 7 Crore or 5% of annual turnover for three years from the date of commencement of production, not exceeding claim amount of Rs 10 crore,” the policy added.
Among the many other provisions, the policy also underlines that manufacturers will be eligible to avail incentive under “early bird scheme” letting eligible units to claim investment subsidy of 30% of eFCI or up to 40% eFCI for investment in specific value-added manufacturing activities as stated in operating guidelines of IDP 4.0.
To encourage a circular economy, clean production, waste reduction, resource efficiency, green energy and safety measures, the Andhra Pradesh government has also proposed the extension of the “de-carbonization subsidy” for investments in specific clean measures under IDP 4.0. “Investments made towards electronic waste recycling units, vehicle scrapping facilities, automated testing stations are eligible projects that qualify to claim de-carbonization subsidy. Investment incurred towards plant and machinery will receive capital subsidy as a percentage of eligible ‘project cost’, the policy document added.
Experts believe that the new EV Policy of Andhra Pradesh is a “timely step” to address the state’s lagging EV adoption and infrastructure. “With only 601 public charging stations, Andhra Pradesh accounts for just 2.4% of India’s public charging network, as per the Bureau of Energy Efficiency. As of December 14th in CY 2024, EV adoption in the state stands at 6.2%, below the national average of 7.39%, according to the Vahan portal,” said Pradeep Karuturi, Head, Centre for Clean Mobility, OMI Foundation.
He pointed out that the policy’s demand incentives are encouraging but could have been linked with the PM E-Drive scheme on ex-factory price to ensure compatibility. “Without this alignment, vehicles eligible for PM E-Drive may miss out on state-level incentives, creating gaps in policy execution. The focus on expanding charging infrastructure, with plans to support 5,000 new stations, addresses a key barrier to EV growth,” he said.
He noted that including electric tractors is a welcome step for the state’s agrarian economy. “The Rs 250 crore R&D grant and plans for a testing center will reduce costs for manufacturers and speed up homologation, aligning with the state’s goal of improving speed of doing business,” he said.
Noting that the target to electrify 100% of the APSRTC fleet by 2030 is commendable, he said with only 1% of its 10,000 buses currently electric, the government should prioritise cities like Visakhapatnam, Tirupati, Amaravati, and Vijayawada before statewide expansion. “The policy is promising but requires effective implementation for impact,” he added.
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