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States seek inputs for revising clean vehicle policies; EVs may get cheaper


Mumbai: Electric vehicles (EV) may get cheaper in Gujarat, Maharashtra and Uttar Pradesh, as these states consider floating purchase incentives in line with the Centre’s flagship EV policy that gives direct subsidies to buyers, said people in the know.

The three state governments have reached out to experts and manufacturers to seek views on how to implement such a policy. The proposed benefits would be on top of the subsidies given by the Centre. This development comes close on the heels of the Delhi Electric Vehicle Policy, 2020 that seeks to subsidise EVs through a feebate structure.

West Bengal, Madhya Pradesh and Odisha governments are also said to be considering similar policies, but there haven’t been any firm discussions so far.

“Because there is so much in the media about EVs and the Delhi policy, some of the states are relooking into whatever they had done to see where they went wrong and what more they can do,” said a person in the know, asking not to be named.

Maharashtra and Uttar Pradesh had announced their state EV policies in 2018 but the proposed plans never took off. Gujarat released a draft EV policy in September 2019, but the final policy is still awaited.

The central government subsidises the cost of electric vehicles for buyers under the second phase of its Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II), with benefits directly linked to the battery size on the vehicles. The subsidies are targeted towards vehicles used for public transport. For personal vehicles it is limited to two-wheelers and works out to Rs 10,000-20,000 per unit.

States like Tamil Nadu and Andhra Pradesh, meanwhile, have policies to attract EV manufacturers with subsidised land, capital, water and electricity, among other benefits.

“We have been saying to other states too that the first thing is demand creation. Even though people like EVs so much, they don’t buy them because they are out of their budget,” said Sohinder Gill, the director general of the Society of Manufacturers of Electric Vehicles.

“Policies such as Delhi’s bring the cost closer to that of combustion engine vehicles. Other states are creating manufacturing attraction, but since there is no demand there is little progress,” he said.

Currently 10 states have announced some form of an EV policy, however, demand-incentives are being rolled out by only Delhi. Under the Delhi government’s feebate structure, polluting vehicles shall pay cess in terms of fuel surcharge, road tax, and congestion fee which will be used to promote cleaner vehicles.

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