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Electric Vehicle Policy in India
Oct 4, 2023

Electric Vehicle Policy in India: A Comprehensive Roundup

With vehicular pollution being a major contributor of global warming, the Indian government has taken up the initiative of reducing the reliance on the vehicles powered by fossil fuel, and to push for electric vehicles. This initiative has been underlined in the National Electric Mobility Plan (NEMP).

NEMP: An Overview

The National Electric Mobility Plan (NEMP) was conceptualised in 2012. It was launched with the intention of boosting the purchase and usage of electric vehicles (EVs), while simultaneously reducing the number of vehicles powered by fossil fuel. This would ultimately lead to the reduction in the level of carbon emission. The objectives of the NEMP are to:
  • increase awareness and encourage the usage of hybrid and electric vehicles
  • make electric vehicles (EVs) affordable and accessible to general public
  • boost the manufacturing capability of EVs and their parts
  • emphasise on the research and development (R&D) of the technology associated with EVs and Hybrid vehicles, such as the battery, battery management system, and enhanced software
  • promote battery swapping and retrofitting technology
To achieve these objectives, the FAME schemes were established under this initiative by the government.

FAME Scheme

Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India (FAME) was a scheme launched as a part of the NEMP. It was divided into two parts: FAME-I and FAME-II. Let us first understand the objectives followed by the features of the FAME scheme:
  1. To encourage manufacturers of EVs and suppliers of materials in producing a higher number of EVs
  2. To curb the rising vehicular pollution in India
  3. To build and widen infrastructure related to electric charging stations

FAME Phase-I features

FAME Phase-I was launched in 2015 and it ended in March 2019.
  • Focus on the development and implementation on creating demand, developing platform for the technology, piloting the project, and creating infrastructure related to charging
  • Installing more than 420 charging stations
  • More than ₹850 crores were allotted by the government to fund the objectives of FAME Phase-I. From this allotted amount, more than ₹350 crores were kept aside to ensure support of more than 2 Lakh EVs

FAME Phase-II features

The second phase of FAME was launched in April 2019, immediately after Phase-I ended. The duration of this phase was supposed to be till March 2022; it has been extended till March 2024.
  • Focus on making public transport services electric
  • Increase in the budget from ₹895 crores to ₹10,000 crores
  • Provision of incentives for the following category of vehicles-
e-bikes/scooters: ₹20,000 incentive per vehicle on registration of 10 Lakh electric two-wheeler e-cars: ₹1.5 Lakhs incentive per vehicle on registration of 35,000 e-cars with a factory price of ₹15 Lakhs Hybrid cars: ₹13,000 - ₹20,000 incentive on registration of hybrid cars costing ₹15 Lakhs. e-rickshaws: ₹50,000 incentive per vehicle on registration of 5 lakh e-rickshaws e-buses: ₹50 Lakhs incentive on registration of 8000 buses, with the maximum cost limit being ₹2 crores
  • Establishing more 2500 charging stations in different parts of the country. These include cities, villages, and hilly areas.

Benefits of FAME scheme

The following are the intended benefits of the FAME scheme:
  • Reducing dependency on fossil fuels for powering vehicles
  • Tackling environmental issues on a larger scale
  • Promotion of public transportation that does not rely on fossil fuels
  • Promotion of renewal energy sources among masses
  • Pushing for charging stations within the reaching distance of customers, thus encouraging the purchase of electric vehicles

Subsidies Offered Under FAME Scheme

The government is focusing on the purchase and the usage of EVs among the Indian populace. To push this agenda, the government is offering subsidies under the FAME scheme. States have been given the freedom to tweak these subsidies in order to push the purchase of EVs. Listed below are some states and the subsidies that they offer on purchase of EVs:

- Delhi

Registration fees for both electric-two-wheeler and four-wheeler have been waived off, along with road tax. For e-bikes/scooters, incentives of ₹5,000 per kWh is offered, going up to ₹30,000 per bike/scooter. For E-cars, this incentive is ₹10,000 per kWh, going up to ₹1,50,000 per e-car. If you scrap your petrol two-wheeler, you get an incentive of ₹10,000 on purchase of an e-bike/e-scooter. After scrapping your two-wheeler for an electric one, purchase electric vehicle insurance for your e-bike/scooter to safeguard it from different risks which can damage it and cause financial burden to you. Claims are subject to terms and conditions set forth under electric vehicle insurance policy.

- Punjab

Registration fees are waived off for electric two-wheelers and electric four-wheelers. Similarly, there is a 100% waiver on road tax for EVs and a 50% waiver for hybrid vehicles. For now, these subsidies are valid for a duration of 5 years. Due to such heavy incentives, you enjoy great savings, which can be invested in a good electric vehicle policy in India.

- Uttar Pradesh

Registration fees have been waived off for EVs (two- and four-wheeler). 100% road tax is waived off for e-bikes/e-scooters, while 75% has been waived off for e-cars. The subsidy is valid for the first 1,00,000 EVs which have been manufactured and sold in the state.

- Maharashtra

Registration fees along with road tax have been waived off for electric two-wheelers and four-wheelers, thus boosting the sales of EVs in the state (and indirectly also the sales any EV policy in India). Incentive of ₹5,000 per kWh, going up to 10,000 is offered on electric bikes/scooters. For e-cars, this incentive goes up to ₹1,50,000. This incentive is valid on battery capacities of 3kWh for electric two-wheelers, and 30kWh for electric four-wheelers. There is an incentive of ₹12,000 for every electric bike or scooter the government will buy back from you. If you scrap your petrol two-wheeler, incentive of ₹7,000 is offered on the purchase of new electric bike/scooter. For four-wheelers, this incentive is ₹25,000 on purchase of e-cars.

Conclusion

Do remember that incentives will not safeguard your newly purchased e-car. Invest in a good electric car insurance policy to protect your investment from unwanted perils. Claims are subject to terms and conditions set forth under electric vehicle insurance policy.   *Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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