State-wise Electric Vehicle Subsidies In India

Continuous evolution in the field of automobiles has churned out quite a few alternatives to the conventional fuels, viz. petrol and diesel. The electric vehicles we see on the roads today are an outcome of this evolution. Electric vehicles do not use fossil fuels for running and have no exhaust pipe hence have zero emissions. Electric vehicles also come with a host of advantages to the user as well. These include low running cost, low maintenance cost and many more. The technology being new, electric vehicles do have a lot of limitations and disadvantages like high cost of ownership, slow recharge times and inadequate charging network. Since these vehicles do not pollute the environment, the central government is encouraging their use by urging state governments to give road and environment tax exemptions under its Faster Adoption and Manufacturing of Hybrid and Electric vehicles or FAME-II scheme. Efforts are also being made to reduce the initial cost of electric vehicles by reducing the GST from 18% to 5%. In addition to these exemptions, individual state governments are trying to reduce the cost of ownership by giving subsidies on the purchase of electric vehicles. Central government is supporting the sales of electric vehicles by giving additional subsidies apart from the ones offered by individual states. Let us take a look at these subsidies in detail.

Photo Credit: ecogears.in

State government subsidies and tax exemptions for Electric Two wheelers:

Nearly all the state governments have completely waivered road tax for electric two wheelers. The only exceptions being Rajasthan where the state government is not exempting road taxes at all. Next in this list is Kerala where the state government has exempted 50% road tax. Madhya Pradesh has waivered 99% of the road tax. Now coming to the subsidies offered by individual state governments, Odisha is the only state giving an outright subsidy of Rs. 5000 irrespective of the vehicle's battery capacity which is the lowest subsidy offered by any state. Rajasthan offers a maximum subsidy of Rs. 10,000 at a rate of Rs. 2500 per kWh of the vehicle's battery capacity. The states of Meghalaya, Gujarat, Assam, Bihar and West Bengal are ahead of Rajasthan in the subsidy race with the individual state governments offering a maximum subsidy of Rs. 20,000 at a rate of Rs. 10,000 per kWh battery capacity. Delhi is offering maximum subsidy worth Rs. 30,000 at a rate of Rs. 5000 per kWh of battery capacity. Maharashtra offers a maximum subsidy amount of Rs. 10,000 with an additional early bird incentive of Rs. 15,000 and Rs. 7000 for scrappage. It must be noted that the early bird incentive can be availed only if you book your electric bike or scooter before 31^st march 2022. In addition to these individual state subsidies, Central government is offering a subsidy of Rs. 15000 per kWh capped at 40% of vehicle cost.

State government subsidies and tax exemptions for Electric Four wheelers:

The road tax exemptions for four wheelers are same as that of the two wheelers. While road tax exemptions are same, individual state government subsidies are different for cars. In case of cars, Meghalaya is the state offering least subsidy with a maximum subsidy amount of Rs. 60,000 at a rate of Rs. 4000 per kWh battery capacity. Odisha is offering an outright subsidy of Rs. 1,00,000 irrespective of the battery capacity. Next in the list are Gujarat, Assam, Bihar and West Bengal where a maximum subsidy of 1,50,000 is offered at a rate of Rs. 10,000 per kWh. Maharashtra state government is offering maximum subsidy of Rs. 1,50,000 at a rate of Rs. 5000 per kWh. In addition to this, the government is also giving Rs. 1,00,000 as early bird incentive. Just like for two wheelers, this incentive is applicable only if you book your car before 31^st march 2022. An additional scrappage incentive of Rs. 25,000 takes your subsidy potential to Rs. 2,75,000. It must be noted that even though Delhi was offering subsidy up to Rs. 1,50,000, the subsidies are now withdrawn since the target limit of sale of 1000 electric cars was fulfilled. In addition to these individual state subsidies, Central government is offering a subsidy of Rs. 10000 per kWh capped at Rs. 1,50,000.