STATE-WISE EV SUBSIDIES IN INDIA: A HANDY LIST OF INCENTIVES AND BENEFITS FOR ELECTRIC VEHICLES

Cost – that four-letter word has been one of the biggest hurdles standing in the way of electric vehicles. That, along with a lack of necessary infrastructure, has meant India’s vehicle industry has continued to rely heavily on the internal combustion engine. However, things are changing – with every passing day, electric vehicles are inching to being within reach of mainstream buyers, spurred on by India’s initiatives to promote e-mobility. The Central government offers sops under the national FAME-II scheme. Providing further impetus to the transition are individual state EV policies, which aim to make EVs even more affordable.

However, each state has its own criteria for electric vehicle subsidies, which means the benefits are more significant in some regions, bringing EVs closer to being an accessible option for mass-market buyers. So, which Indian state provides the heftiest subsidies on the purchase of an electric vehicle? Let’s take a closer look.

State EV subsidies on electric two-wheelers

State-specific EV policies have been drawn up for a four-to-five-year period from the time of notification and will only subsidize a limited number of vehicles. Most Indian states, in their EV policies, have decided to allow subsidies for electric two-wheelers (that are eligible for incentives under the FAME-II scheme) based on the size of their lithium-ion battery packs. The incentive amount is decided on a ‘per kWh of battery capacity’ basis, with only two states offering subsidies on a different basis.

Leading the way in terms of the highest subsidy available in Delhi, which offers an incentive of Rs 5,000 per kWh and a maximum of Rs 30,000 (provided the battery is bigger than 5 kWh). Second on the list currently is Maharashtra, which, too, offers a subsidy of Rs 5,000 per kWh, with the total subsidy capped at Rs 10,000. However, with an early bird incentive (of up to Rs 15,000; valid only till 31 December 2021), the total subsidy for any electric two-wheeler with a 3 kWh (or bigger) battery would be eligible for is Rs 25,000.

State-wise incentives for electric two-wheelers

State per kWh of battery capacity Max subsidy Road tax exemption
Delhi Rs 5,000 Rs 30,000 100%
Maharashtra Rs 5,000 Rs 25,000* 100%
Meghalaya Rs 10,000 Rs 20,000 100%
Gujarat Rs 10,000 Rs 20,000 50%
Assam Rs 10,000 Rs 20,000 100%
Bihar Rs 10,000 Rs 20,000 100%
West Bengal Rs 10,000 Rs 20,000 100%
Rajasthan Rs 2,500 Rs 10,000 NA
Odisha NA Rs 5,000 100%
Uttar Pradesh No No 100%
Kerala No No 50%
Karnataka No No 100%
Tamil Nadu No No 100%
Telangana No No 100%
Madhya Pradesh No No 99%
Andhra Pradesh No No 100%
Punjab No No 100%

*including early-bird incentive; ^policy yet to be approved

Meghalaya, Assam, Gujarat, and West Bengal offer a higher per kWh subsidy of Rs 10,000, with the total subsidy available capped at Rs 20,000. Bihar’s EV policy – currently yet to be approved – also offers similar benefits. Rajasthan offers a subsidy of Rs 5,000 for two-wheelers with a 2 kWh battery and up to Rs 10,000 for one with a battery bigger than 5 kWh. Odisha, on the other hand, offers a flat subsidy of Rs 5,000.

States such as Andhra Pradesh, Karnataka, Madhya Pradesh, Telangana, Tamil Nadu, Uttarakhand, Punjab, and Uttar Pradesh do not offer any direct subsidies to electric two-wheeler buyers under their policies.

Road tax for electric vehicles is completely waived in most of these states, except for in Gujarat and Kerala, where buyers have to pay 50 percent of the total road tax amount.

State EV subsidies on electric cars and SUVs

Just like with two-wheelers, electric cars and SUVs, too, are subsidized by state EV policies. However, the total number of vehicles covered under these policies is significantly lower. Electric cars have significantly larger batteries and are eligible for a substantial amount of money in subsidies. Most states have capped the total number of electric cars to be subsidized at 10,000 units. The ex-factory cost limit for eligible vehicles is pegged at Rs 15 lakh, which means at present, it’s only the Tata Tigor EV Ziptron and the Tata Nexon EV that qualify for incentives in all states. Larger, more expensive EVs – including the MG ZS EV and Hyundai Kona – do not qualify for these subsidies.

On the four-wheeler front, it is Maharashtra that currently leads the way. The base incentive of Rs 5,000 per kWh is the same as for electric two-wheelers, but the maximum subsidy is capped at Rs 1.50 lakh. However, with the early bird incentive (up to Rs 1 lakh) accounted for, the total subsidy amount rises to Rs 2.50 lakh.

State EV subsidies on electric cars and SUVs

State per kWh of battery capacity Max subsidy Road tax exemption
Maharashtra Rs 5,000 Rs 2,50,000* 100%
Delhi Rs 10,000 Rs 1,50,000 100%
Gujarat Rs 10,000 Rs 1,50,000 50%
Assam Rs 10,000 Rs 1,50,000 100%
Bihar Rs 10,000 Rs 1,50,000 100%
West Bengal Rs 10,000 Rs 1,50,000 100%
Odisha NA Rs 1,00,000 100%
Meghalaya Rs 4,000 Rs 60,000 100%
Rajasthan No No NA
Uttar Pradesh No No 75%
Kerala No No 50%
Karnataka No No 100%
Tamil Nadu No No 100%
Telangana No No 100%
Madhya Pradesh No No 99%
Andhra Pradesh No No 100%
Punjab No No 100%

*including early-bird incentive; ^policy yet to be approved

Delhi, Gujarat, Assam, and West Bengal offer a higher per kWh incentive of Rs 10,000, but the total subsidy is limited to Rs 1.50 lakh. Bihar’s yet-to-be-notified EV policy also mentions similar benefits. Odisha offers an incentive of up to Rs 1 lakh for eligible vehicles, while Meghalaya – with Rs 4,000 per kWh – offers a total subsidy of Rs 60,000.

Rajasthan, Andhra Pradesh, Karnataka, Madhya Pradesh, Telangana, Tamil Nadu, Uttarakhand, Punjab, and Uttar Pradesh do not extend direct subsidies for electric cars and SUVs in their policies.
Once again, road tax for electric four-wheelers is completely waived in most states, except in Gujarat and Kerala, where buyers have to pay 50 percent of the total road tax amount, and in Uttar Pradesh, where buyers are needed to pay 75 percent of the road tax amount.

Registration charges, meanwhile, have been waived for all kinds of electric vehicles across the country. In August, the Ministry of Road Transport and Highways (MoRTH) announced all battery-operated vehicles are exempt from ‘the payment of fees for issue or renewal of registration certificate.’

This article will be updated as and when new policies are notified, and existing policies are modified.

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