09 Dec, 24

India’s transition to electric mobility is well underway, and this shift is not only driven by the growing awareness of environmental benefits but also by robust government policies and attractive incentives for EV users. The Indian government has recognized the importance of reducing its dependence on fossil fuels and addressing air pollution in cities. To this end, several national and state-level policies have been introduced to promote the adoption of electric vehicles (EVs) and the development of EV infrastructure.

In this blog, we’ll dive into the key EV policies and user incentives in India, helping you understand the benefits available to EV owners and how these measures are shaping the future of mobility in the country.

Key National Policies for EV Adoption in India

1. FAME II Scheme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles)

The FAME II scheme, launched in 2019, is the flagship initiative by the Indian government aimed at promoting the adoption of electric and hybrid vehicles. The scheme is part of the National Electric Mobility Mission Plan (NEMMP) and focuses on:

Subsidies for EV buyers: Under FAME II, substantial subsidies are provided for the purchase of electric two-wheelers, three-wheelers, four-wheelers, and buses. These subsidies are designed to reduce the upfront cost of EVs, making them more affordable for the masses.

Incentives for Public Charging Infrastructure: The scheme also provides financial assistance for setting up EV charging stations across the country. This ensures the availability of robust infrastructure, addressing one of the key concerns of potential EV buyers—charging accessibility.

Focus on Public Transport: FAME II heavily promotes the electrification of public transport, with significant subsidies provided for electric buses and three-wheelers, particularly for public and shared mobility services.

2. National Electric Mobility Mission Plan (NEMMP)

The NEMMP is a long-term initiative by the Indian government to develop a vibrant EV ecosystem in the country. The plan aims to achieve 30% electric vehicle penetration by 2030. Key objectives of the NEMMP include:

EV manufacturing: The policy encourages domestic production of EV components, including batteries and motors, to reduce dependence on imports and create jobs.

Technology Development: NEMMP supports research and development in EV technologies to enhance performance, increase range, and reduce the cost of EVs.

Consumer Awareness Programs: The government is investing in educating the public about the benefits of EVs and the incentives available to them, increasing overall adoption.

3. Production-Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC) Batteries

Given that batteries are the most critical and expensive component of an electric vehicle, the Indian government launched the PLI scheme to boost the domestic manufacturing of advanced chemistry cells (ACC) and lithium-ion batteries. This initiative will help reduce the cost of EV batteries, making electric vehicles more affordable for Indian consumers in the long run.

Subsidies for manufacturers: Under the PLI scheme, battery manufacturers are provided financial incentives to set up production units in India, reducing reliance on imports and building a local supply chain for EV batteries.

4. Scrappage Policy

The scrappage policy, introduced in 2021, aims to encourage the phasing out of old and polluting vehicles. This policy is indirectly linked to promoting the adoption of electric vehicles by:

Incentives for scrapping old vehicles: Owners who scrap their old internal combustion engine (ICE) vehicles receive incentives in the form of discounts on the purchase of new EVs.

Green Tax: The policy introduces a green tax on older vehicles to discourage their use and promote the switch to electric vehicles, which are exempt from this tax.

State-Level Policies and Incentives for EV Users

In addition to national policies, several Indian states have implemented their own EV policies to accelerate the adoption of electric vehicles. These policies typically include a mix of subsidies, tax benefits, and infrastructure development initiatives.

1. Delhi EV Policy

Delhi has been at the forefront of EV adoption in India, thanks to its ambitious EV policy introduced in 2020. Key highlights include:

Direct subsidies: The Delhi government offers financial incentives for the purchase of electric two-wheelers, three-wheelers, and cars. These subsidies are in addition to those offered under FAME II, making EVs significantly more affordable in the city.

Waiver on road tax and registration fees: EV owners in Delhi are exempt from paying road tax and registration fees, further reducing the overall cost of ownership.

Charging infrastructure: The policy also focuses on the rapid development of public charging stations, with the goal of installing charging points every 3 kilometers within the city.

2. Maharashtra EV Policy

Maharashtra has also introduced an EV policy to promote the use of electric vehicles across the state. Some of the key incentives for EV users in Maharashtra include:

Subsidies on EV purchases: The state provides subsidies for the purchase of electric two-wheelers, three-wheelers, and cars. The subsidies are higher for early adopters, encouraging quicker adoption.

Incentives for Charging Infrastructure: Maharashtra’s EV policy encourages the setting up of charging stations in residential complexes, public parking spaces, and highways through financial incentives for charging point operators (CPOs).

Waiver of Road Tax: EV buyers in Maharashtra are also exempt from paying road tax and registration fees, similar to Delhi’s policy.

3. Gujarat EV Policy

Gujarat’s EV policy offers one of the highest subsidies for electric two-wheelers and three-wheelers, making it a significant market for affordable EV adoption. Key features include:

Subsidies on electric vehicles: The state provides direct subsidies for the purchase of electric two-wheelers, three-wheelers, and cars, especially in the affordable and commercial vehicle segments.

Charging Infrastructure Development: Gujarat has laid out a clear roadmap for increasing the number of charging stations, especially in cities like Ahmedabad and Surat, which are emerging as key hubs for EV adoption.

User Incentives for EV Owners

Several attractive incentives are provided to individual EV users across India, making it easier to transition from traditional ICE vehicles to electric mobility. Here’s a quick summary of the primary benefits:

1. Income Tax Benefits

The Indian government offers tax benefits under Section 80EEB of the Income Tax Act for EV buyers. Individuals who purchase electric vehicles can avail of a deduction of up to ₹1.5 lakh on the interest paid on loans taken for EV purchases. This benefit is available for both two-wheelers and four-wheelers, encouraging middle-class families to consider EVs.

2. Lower Running Costs

EVs have significantly lower running costs compared to ICE vehicles. With electricity prices being more stable and affordable than petrol or diesel, EV users enjoy substantial savings in the long run. Additionally, EVs have fewer moving parts, reducing maintenance costs over time.

3. Exemption from Green Tax and Emission Norms

Electric vehicles are exempt from green taxes and emission-related fines. As the government tightens pollution norms, particularly in cities like Delhi and Mumbai, EV owners will not have to worry about emission compliance or the costs associated with maintaining an old ICE vehicle to meet these standards.

4. Subsidized Charging Infrastructure

EV owners benefit from the growing number of subsidized and government-supported charging stations. In several cities, charging points are being installed at subsidized rates, making it easier and more affordable for users to charge their vehicles at public stations.

Conclusion: A Promising Future for EV Adoption in India

India’s policies and incentives for electric vehicles are creating a fertile environment for the growth of the EV market. From national initiatives like FAME II and the PLI scheme to state-level subsidies and tax benefits, the government is committed to making EVs more accessible and affordable for the public.

For EV users, these policies translate into tangible financial savings, reduced pollution, and an overall more sustainable transportation solution. As the country’s EV infrastructure continues to expand and more people embrace electric mobility, India is well on its way to becoming a global leader in sustainable transportation.

So, if you’re considering making the switch to an electric vehicle, now is the time to take advantage of the available incentives and contribute to a greener, cleaner India!