Gujarat EV policy out: Subsidies up to 1.5 lakhs on EV purchase

With the vision to see two lakh electric vehicles on the roads in the next four years, Gujarat Chief Minister Vijay Rupani yesterday announced the Gujarat Electric Vehicle Policy 2021.

Hailed as a landslide move by EV manufacturers and retailers alike, the Gujarat Electric Vehicle Policy 2021 provides for a subsidy of up to INR 20,000 on electric two-wheelers, INR 50,000 for electric three-wheelers, and up to INR 1.5 lakh for electric cars. These benefits will be given by the State along with the benefits offered by the Government of India under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India - Phase II (FAME II) scheme on the purchase of EVs.

The policy's main objectives are to increase the uptake of EVs and EV charging infrastructure in the State, make Gujarat a hub for EVs and related materials, and curb vehicular emissions.

Key takeaways of the Gujarat EV policy include:

• Increase in the use of e-vehicles in the State in coming four years
• Make Gujarat a hub for e-vehicles and various materials related to it
• Encourage young startups and investors in the field of electric mobility
• Control air pollution and keep the environment safe
• Currently 278 charging stations are available in the State for the charging of e-vehicles. Infrastructure for new 250 charging stations to come up, which takes total tally to 528
• Petrol pumps will be given approval for establishing charging stations
• Charging facilities to come up at housing and commercial infrastructures
• E-vehicle registered at Gujarat RTO will be exempted from the registration fee, within four years, fuel worth INR 5 crore will be saved
• Minimum 6 lakh ton CO2 emission will be reduced
• Subsidy up to Rs. 20,000 for electric two-wheelers, Rs. 50,000 for electric three-wheelers and up to Rs. 1,50,000 for electric four-wheelers will be directly credited to bank accounts through direct benefit transfer (DBT)
• Gujarat will give double the amount of subsidy than any other state for e-vehicle on per kilowatt
• Gujarat government will encourage and give subsidy to e-vehicle purchasers along with benefits from the Government of India's Fame -II scheme to encourage e-vehicles

An interesting highlight of the policy is that unlike the FAME II scheme, the subsidy is not limited to users for commercial electric four-wheeler usage.

Further, experts underscore, the waiving off registration charges would make EVs more affordable and give it the extra push needed to attract buyers.

Considering the significance of home and destination charging, the policy directs housing and commercial establishments to furnish a 'No Objection Certificate' (NOC) to members who want to install charging stations, and allot designated parking spaces – this move, experts believe, would further help in scaling sales of EVs within the State.

The policy also provides waiving off electricity duty for EV charging, this is believed to bring relief to Charge Point Operators (CPOs) who incur huge capital investment for upstream power supply in case of setting up fast Public Charging Stations (PCS).

According to the Department of Heavy Industry (DHI), as on date, 3.58 lakhs electric vehicles have been sold in India under the FAME II scheme.

Earlier this month, in an encouraging move, the government revised subsidies under the FAME II policy for driving the adoption of electric vehicles in the country. This move, along with the Gujarat state policy could result in one of the most inexpensive EVs in the state of Gujarat. 

Industry Reaction to the Gujarat EV Policy:

The Society of Manufacturers of Electric Vehicles (SMEV), a registered association representing Indian manufacturers of electric vehicles (EV) and electric vehicle components hailed the Gujarat State Government decision.

"We thank the government of Gujarat for announcing a promising and bold EV policy. The policy certainly has a potential to make Gujarat an EV hub and would mobilize a rapid adoption of electric vehicles in the state," said Sohinder Gill, CEO, Hero Electric and DG, Society of Manufacturers of Electric Vehicles (SMEV). 

Tata Motors, a leading player in the EV segment also complimented the Gujarat State Government for releasing a strong and supportive EV policy.

"We welcome the move by the Gujarat Government offering incentive support for all categories of electric vehicles. This clearly signals a strong resolve of the government towards cleaner environment & a sustainable future for the country," said Shailesh Chandra, President, Passenger Vehicle Business at Tata Motors.

Mr. Chandra noted the support for developing EV charging infrastructure will also help in "accelerating ecosystem development and bring greater comfort to EV buyers"

Tarun Mehta, CEO and co-founder of Ather Energy tweeted, "Gujarat might just go from having the most expensive EVs in the country to the cheapest in one policy change today."