Maharashtra aims to be India’s biggest EV producer

After Delhi, Gujarat, Tamil Nadu, and Karnataka, Maharashtra is the latest state to jump onto India’s electric vehicle bandwagon. With its freshly drafted electric vehicle (EV) policy, 2021—which is essentially an update on the state’s 2018 EV policy—Maharashtra is aiming to become the “topmost producer of battery-powered electric vehicles in India” in terms of annual production capacity and expects EVs to make up 10% of all new vehicle registrations—which comes down to around 3 lakh vehicles a year—by 2025. To achieve this, it has announced an outlay of ₹930 crore till March 31, 2025. According to the new policy, EVs will also be exempt from road tax and registration charges. “We have studied the EV policies of other states and countries before deciding our policy,” said Aditya Thackeray, Maharashtra’s environment minister.

According to the policy, electric car and SUV owners will now be able to avail an incentive of ₹5,000 per kWh of battery capacity. This subsidy, however, can only be availed by vehicles with a battery capacity of up to 30 kWh—making it a total incentive of ₹1.5 lakh, which is about ₹50,000 higher than the earlier policy incentive limit. There’s more. Maharashtra has decided to give an early bird incentive to people who buy an electric car or SUV before December 31, 2021. This brings the total subsidy amount to ₹2.5 lakh.

Not surprisingly, this new policy has enthused India’s EV industry, with many arguing that this could encourage people to go green sooner rather than later. “The Maharashtra government policy grants us the privilege to reach out to our potential customer base in the state. With the amendment of FAME 2 by the central government, and now the individual state policies like this one, have only encouraged the adoption of electric vehicles in India,” said Sohinder Gill, director general of the industry body Society of Manufacturers of Electric Vehicles (SMEV).

The central government floated its Faster Adoption and Manufacturing of Hybrid and EV (FAME) scheme first in 2015, with an initial outlay of $130 million worth of subsidies for electric vehicles. In its second iteration in 2019, the government scaled up the subsidy outlay for EVs to $1.4 billion. The FAME 2 scheme was extended by two years in June 2021. It was initially intended to be implemented over a period of three years from April 1, 2019, but will now expire on March 31, 2024. According to the new scheme, the demand incentive for electric two-wheelers priced from ₹10,000/KWh km is ₹15,000/KWh. Industry insiders have pointed out that this amendment to FAME 2 will go a long way in reducing the overall price of vehicles by at least ₹7,000 to ₹20,000.

Focus on electric two-wheelers

Maharashtra’s new policy also has a lot in store for electric two-wheelers as they are the low hanging fruits in EV adoption. The state government expects electric two-wheelers to make up 10% of all new vehicle registrations by 2025. According to the policy, the state will subsidise the first 100,000 electric two-wheeler buyers and they, too, will get an incentive of ₹5,000 per kWh of battery capacity. The incentive limit has been capped at ₹10,000, double the previous limit. It also has an early bird incentive of up to ₹15,000 (for an e-two-wheeler with a 3 kWh battery) for people who purchase the two-wheeler before December 31, 2021—making them eligible for a total benefit of ₹25,000.

All incentives, the policy said, will be handed directly to the manufacturers of these vehicles, to save buyers the hassle of coordinating with government offices to receive their subsidy. “Additionally, manufacturers of e-two-wheelers will also receive an additional incentive of up to ₹12,000 for providing a minimum five-year warranty on the battery and an assured buyback scheme,” the policy document read.

India’s largest electric two-wheeler maker Hero Electric said that the new policy will make EVs an attractive option for people. “With the announcement of revised EV policy by the state of Maharashtra, we expect the shift towards EV mobility in the country to gain more traction in the coming few days. The [new] policy, which aims to convert 10% of their overall EVs by 2025 and install 1500 charging stations across the state, will only make EVs an attractive option for mobility in the state. We are extremely bullish about achieving our targets of 1 million scooters on road over the next few years,” Naveen Munjal, MD, Hero Electric, said.

Maharashtra’s EV policy document also says that the state is aiming to subsidise 10,000 electric car and SUV buyers. It has further announced that starting April 2022, all new vehicles in the government fleet will be electric-only.

When it comes to the charging infrastructure, the state aims to set up around 2,500 charging stations in seven urban centres in the next four years.

Nagesh Basavanhalli, MD and Group CEO of the diversified engineering company, Greaves Cotton and director of Ampere Vehicles, which was acquired by Greaves in 2019, pointed out that Maharashtra’s new EV policy has the potential to be a “great enabler of clean and green mobility.” “This will not only boost the growth of electric vehicles but will also provide employment at various levels and give impetus to the setting up of charging infrastructure. It coincides with Ampere’s ambition of expanding in the state and ensuring easy accessibility to an affordable range,” he said.

The policy document also contained a clause that said that urban local bodies will be encouraged to provide property tax rebates to residential owners for setting up private charging infrastructure on their premises.