At this point, it is beyond any doubt that electric vehicles are the future and the government has been working hard to fasten the adoption of EVs in India. As part of this, the government has been rolling out several nationwide and state-wise policies to help the automakers, manufacturers, commercial vehicle segment as well as EV passenger vehicle buyers. Now, the UP government has come out with an extensive EV policy that provides benefits to almost the entire EV segment and its ancillaries.
With the aim to promote faster adoption of environment-friendly clean mobility solutions and create a conducive ecosystem for Electric Vehicles (EVs) in Uttar Pradesh, the Yogi Adityanath government has announced a three-pronged policy for the new electric vehicle manufacturing. The main objective of the policy is not only to create an eco-friendly transportation system in the state but also to make Uttar Pradesh a global hub for the manufacturing of electric vehicles, batteries, and associated equipment. The policy also aims to fulfill the state’s aspiration of becoming a trillion-dollar economy by leveraging its potential and opportunities in the EV industry.
In this direction, the policy provides for a three-pronged attractive incentive regime that includes benefits to consumers for purchasing EVs; to manufacturers of EVs, EV batteries, and related components; and to service providers developing charging/swapping facilities.
According to the official spokesman, the policy provides attractive subsidies to the buyers in order to open up the electric vehicle market in the state. This includes 100 percent road tax and registration fee exemption during the first three years of the effective period of the policy on all segments of electric vehicles purchased and registered in Uttar Pradesh. The same exemption will apply in the fourth and fifth years also on all segments of EVs if the vehicle is purchased, registered as well as manufactured in Uttar Pradesh.
Also, the policy provides an attractive Purchase Subsidy Scheme with a total budget outlay of Rs 500 crore, which will be notified for a period of one year on all the segments of electric vehicles. This includes a 15 percent subsidy on factory cost for purchasing two-wheeler EVs up to a maximum of Rs 5,000 per vehicle subject to the first 2 lakh EVs purchased; up to a maximum of Rs 12,000 per three-wheeler EV subject to a maximum first 50,000 such EVs purchased; up to Rs 1 lakh per four-wheeler electric vehicle subject to a maximum of first 25,000 EVs purchased; up to Rs 20 lakh per E-Bus (non-government) subject to a maximum of first 400 such E-Buses; and 10 percent subsidy on factory cost for purchasing E-Goods Carriers up to Rs 1,00,000 per vehicle to maximum first 1000 E-Goods Carriers purchased.
On the other hand, government employees will be encouraged to buy EVs, for which advances will also be allowed by the state government. Moreover, the policy provides for enabling provisions to attract big-ticket investments in EV Batteries and EV manufacturing.
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The new policy provides capital subsidy at the rate of 3 percent on investment subject to a maximum of Rs 1,000 crore per project to a maximum first two Ultra Mega battery projects, investing Rs 1,500 crore or more each for setting up battery manufacturing plants in the State of minimum production capacity of 1 GWh.
MSME projects are being provided a capital subsidy of up to a maximum of Rs 5 crore per project, while large projects are being provided a capital subsidy of up to a maximum of Rs 90 crore per project.
Also, the policy provides stamp duty reimbursement to the manufacturers, which is at the rate of 100 percent to the Integrated EV Project & Ultra Mega Battery project for setting up facilities anywhere in the State, and at the rate of 100 percent in Purvanchal and Bundelkhand region, 75 percent in Madhyanchal and Pashchimanchal (except Ghaziabad and Gautam Buddha Nagar district) and 50 percent in Ghaziabad and Gautam Buddha Nagar district to Mega/ Large/ MSME projects.
Furthermore, incentives have been provided for setting up a Centre of Excellence (CoE) by government organizations Public Sector Undertakings, or Private companies in the field of electric vehicles as a grant of 50 percent subject to a maximum of Rs 10 crore per project to a maximum of 5 such projects.
Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV) said, “We welcome the progressive and inclusive EV policy rolled out by the UP government. The three-pronged focus is an amplifier for shaping positive consumer and manufacturer sentiment while overcoming the circumspect lines of investment in EV technology. The subsidies, exemptions, and establishment of dedicated facilities will galvanize UP into a pioneering stalwart of the EV discourse among other champion states. This comprehensive move will benefit not only the OEMs but also sub-industries such as battery manufacturing, components, logistics, and so on. This would also help circumvent the struggle to find and purchase quality components from hyperlocal sources, thus paving a seamless path for electric green mobility.”
With such extensive measures, the adoption of EVs will definitely be helped. However, how much faster does it make this transition is something we will have to wait and see.
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