Adoption of electric vehicles (EVs) in India is slowly starting to pick up, and today, the government of Gujarat has taken another step to accelerate EV uptake in the state. As part of the Gujarat State Electric Vehicle Policy 2021, the state government has unveiled a four-year plan with a total outlay of Rs 870 crore to be offered as subsidy/incentive for new buyers of electric vehicles across segments, as well as for those investing in the development of infrastructure for EVs.
In a press conference held earlier today, Gujarat Chief Minister Vijay Rupani unveiled the state's EV policy that will bring tangible benefits for those purchasing an electric two-wheeler, three-wheeler or four-wheeler, along with those who will be setting up charging stations across the state. These benefits are over and above those already offered by the national FAME-II subsidy scheme. Gujarat estimates these will help the state save fuel expenditure of up to Rs 5 crore, and also reduce CO2 emissions by six lakh tonnes in the next four years.
Gujarat EV Policy 2021: What are the benefits for the buyers?
Under its policy (which will be valid till 1 July, 2025), the Gujarat government will provide subsidies to buyers of three categories of electric vehicles " two-wheelers, three-wheelers and four-wheelers. The policy targets to subsidise the purchase of a total 200,000 EVs, which will include 110,000 e-two-wheelers, 70,000 e-three-wheelers and 20,000 e-four-wheelers.
The incentive of Rs 10,000 per kWh of battery capacity is the highest offered by any state in India, but the total subsidy is capped at Rs 20,000 for electric scooters and motorcycles, at Rs 50,000 for e-rickshaws and at Rs 1.5 lakh for electric cars and SUVs. These incentives will be credited directly by the state transport department to the buyer's bank account once the purchase document of the vehicle has been authenticated.
Do note that there is a price threshold for EVs that are eligible for this subsidy. To qualify for this incentive, the ex-factory price of an e-two-wheeler cannot exceed Rs 1.5 lakh. Similarly, the cap for e-rickshaws to be eligible is Rs 5 lakh, and for electric cars, it's Rs 15 lakh. Notably, the subsidy is also being offered to those buying the vehicles for private use and is not limited to commercial buyers.
Prices of Ather Energy's 450 Plus and 450X scooters in Gujarat are set to drop by Rs 20,000. Image: Ather Energy
The price cap means most electric cars on sale at present (including the Hyundai Kona Electric, MG ZS EV, Mercedes-Benz EQC and Jaguar I-Pace) will not be eligible for the Gujarat state subsidy. However, the Tata Nexon EV, which is priced from Rs 13.99 lakh, will benefit from this policy, as it will be eligible for the full Rs 1.5 lakh subsidy on offer, which will bring its purchase cost down to roughly the same price as in Delhi.
As for electric two-wheelers, all electric bikes and scooters with a 2 kWh lithium-ion battery will be eligible for the full Rs 20,000 incentive. Prices of the Ather 450 Plus and 450X are expected to drop to Rs 1.07 lakh and Rs 1.27 lakh respectively, while the cost of models such as the TVS iQube and Revolt RV400 are expected to be well under Rs 1 lakh. With a Rs 20,000 incentive on offer, the TVS iQube's price in Gujarat (when it is launched there in the coming months) will be closer to Rs 90,000, while the Revolt RV400's end price could be as low as Rs 87,000. Other electric two-wheeler manufacturers are also likely to announce revised prices for their models in Gujarat.
To further sweeten the deal, the Gujarat government will also waive off the registration fee for buyers of electric vehicles, making them that much more affordable.
Gujarat EV Policy 2021: What are the benefits for charging infrastructure developers?
At present, Gujarat has a total of 278 charging stations across the state, and with this policy, aims to add 250 more stations, taking the count to 528 charging stations. To this end, the government has said it will provide approval to fuel pumps across the state to set up EV charging stations in their premises.
Those who set up the first 250 commercial public EV charging stations will be eligible for a 25 percent capital subsidy on equipment/machinery (limited to Rs 10 lakh per station). Additionally, Gujarat will waive off electricity duty for EV charging stations for the duration of the policy. More details on how developers will be able to avail of this subsidy will be shared in the time to come.
The policy also directs all housing and commercial establishments to furnish a 'No Objection Certificate' (NOC) to members who want to install charging stations, and allot designated parking spaces.
Gujarat EV Policy 2021: What does the EV industry have to say?
Responding to the Gujarat government's announcement, Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV), said, "We thank the government of Gujarat for announcing a promising and a bold EV policy. The policy certainly has a potential to make Gujarat an EV hub and would mobilise a rapid adoption of electric vehicles in the state. We are excited to be part of this journey and would put our all efforts towards achieving the state government's target under the policy. The policy also gives thrust on the charging infrastructure that would address the issue of range anxiety, especially amongst the people who want to buy an electric four-wheeler."
Gill, who is also CEO at Hero Electric, added the company expects a "multi-fold increase" in the sales of its low-speed two-wheelers in the state.
Tarun Mehta, co-founder and CEO of Ather Energy, also welcomed the Gujarat government's new EV policy.
"The new electric vehicle policy introduced by the Gujarat government is a great move and will have a considerable impact on the adoption rate of EVs in the state. Gujarat has always taken a lead in encouraging green mobility through various progressive policies and initiatives, including the proposal to have the first EV only city, Kevadia. The government offering double the subsidy of any other state for every kWh will make it a leading destination for electric vehicles. The incentives will make vehicles more affordable and accessible to the end consumers and will accelerate the charging infrastructure in the state. More progressive policies coming into play will certainly fast-track electric mobility adoption in the country", said Mehta.
Adding to Gill's statement, Naveen Munjal, Managing Director at Hero Electric, said, "The revised EV policy by the state of Gujarat post the recent amendments of the central FAME policy is an excellent move which will further bridge the gap and make the switch to electric vehicles an attractive option. With this policy, the prices of Hero's EVs will further come down, making them the most affordable in the state of Gujarat when compared to pricing across the country. Further, the allocation of funds and capital to setup additional charging stations will help build the much-needed charging infrastructure and address range anxiety of the consumer. As we at Hero Electric continue to expand our reach, set up charging points and reskill mechanics to create an ecosystem for EVs, additional subsidies from state governments through policies as this will help in the growth of EVs and transform the sector into a cleaner and greener mode of transportation."
Commenting on the Gujarat EV policy, Shailesh Chandra, President, Passenger Vehicle Business Unit, Tata Motors, said "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 and a sustainable future for the country. Also, the support extended towards charging infrastructure will accelerate the ecosystem development and bring a greater comfort for EV buyers. We compliment the Gujarat government for introducing such a progressive policy."
Mr. Mahesh Babu, CEO, Mahindra Electric Mobility Ltd, responded to the policy announcement with enthusiasm, as the policy is likely to spur sales of the brand's Treo electric three-wheeler in the state.
"We thank the Gujarat government for notifying the new EV policy which is both progressive and comprehensive in nature. The outlay of Rs 870 crore over the next four years will help EVs flourish in the state of Gujarat. The policy outlines clear adoption strategies, especially in the last mile mobility segment. The fiscal benefits being offered by the government will directly benefit the end customer while the non-fiscal benefits will help develop the overall EV ecosystem in the state. Mahindra is eager to deploy products like the Treo three-wheeler range which will help customers to earn more given its lower operating cost and will help Gujarat become one of the leading states in EV adoption states in the country", said Babu.