Electric Vehicle Subsidies and Benefits in India: Statewise List

Until recently, electric vehicles’ costs have been an impediment to their adoption. India’s car industry was unable to develop any viable alternatives to internal combustion engines due to this and a lack of adequate infrastructure. As e-mobility initiatives in India make electric vehicles more accessible, things are beginning to change – increasingly, electric cars will be for sale to mainstream consumers. FAME-II is a government scheme that provides sops for increasing electric vehicle ownership, and individual state policies make electric vehicles more affordable by slashing fees.

While each state has its own criteria for subsidizing electric vehicles, the benefits vary greatly throughout the country. In some regions, EVs are more affordable than others, making them an attractive option for mainstream buyers. What is the state in India that offers the most generous incentives on electric vehicle purchases?

In today’s post, we will be giving you a statewide list of 2 wheeler and 4 wheeler EV subsidies in India. Kindly note that this list is updated as of September 2021. Here’s what we need to know.

Statewise List of two-wheeler EV Subsidies:

[tba = To Be Approved; eb = Includes Early Bird Incentive]

A limited number of electric vehicles will be subsidized through state-specific plans that run for four to five years from the time of notification. Indian states allow subsidies for electric two-wheelers (that are eligible for FAME-II incentives) depending on the size of their lithium-ion battery packs as a feature of their EV policies. There are two states that offer subsidies based on a different metric than those of ‘per kWh of battery capacity.’

Delhi has the highest subsidy in the country, offering ₹5,000 per kWh, up to ₹30,000 (provided the battery has a capacity of more than 5 kWh). Maharashtra follows, offering a subsidy of ₹5,000 per kWh, with a cap of ₹10,000 on the total subsidy. If you add the early bird incentive (of up to ₹15,000, valid only until 31 December 2021), your total subsidy for any electric two-wheeler with a 3 kWh (or bigger) battery is ₹25,000.

State government subsidies in Meghalaya, Assam, Gujarat, and West Bengal range from 10,000 to 20,000 per kWh, with the total subsidy available capped at ₹20,000. A similar benefit can also be found in Bihar’s EV policy, which is currently awaiting approval. For two-wheelers with batteries of up to 2 kWh, Rajasthan offers a subsidy of ₹5,000, and for ones with batteries over 5 kWh, up to ₹10,000. As opposed to this, Odisha provides a flat subsidy of ₹5000.

There are no direct subsidies offered by government policies in Andhra Pradesh, Karnataka, Madhya Pradesh, Telangana, Tamil Nadu, Uttarakhand, Punjab, and Uttar Pradesh for electric two-wheeler users.

All states exempt electric vehicles from road taxes, with the exception of Gujarat and Kerala, where a 50% road tax contribution is required.

Statewise List of four-wheeler EV & SUV Subsidies:

[tba = To Be Approved; eb = Includes Early Bird Incentive]

State EV policies also subsidize electric cars, just like their two-wheeling counterparts. These policies cover a significantly smaller number of vehicles, however. There is a considerable amount of money available in the form of subsidies for electric cars, as they have larger batteries. Almost all states limit the number of electric cars eligible for subsidies to 10,000 units. At present, incentives are limited to Tata Tigor EV Ziptron and Tata Nexon EV, which have an ex-factory price limit of ₹15 lakh. The Hyundai Kona Electric and the MG ZS EV can’t be subsidized because they are larger, more expensive EVs.

Maharashtra leads the way in the four-wheeler market. The maximum subsidy is capped at ₹1.50 lakh, and the base incentive is the same as for electric two-wheelers at ₹5,000 per kWh. The total subsidy amount rises to ₹2.50 lakh when the early bird incentive is taken into account (of up to ₹1 lakh).

While Delhi, Gujarat, Assam, and West Bengal offer higher per-kWh incentives, the overall amount is capped at ₹1.50 lakh. As in Bihar, Bihar’s EV policy has yet to be notified but offers similar advantages. Meghalaya offers a total subsidy of ₹60,000 with a one-time subsidy of ₹4,000 per kWh for eligible vehicles, while Odisha offers a one-time incentive of up to ₹1 lakh.

There are no direct subsidies for electric cars and SUVs in the policies of Punjab, Uttar Pradesh, Andhra Pradesh, Karnataka, Madhya Pradesh, Telangana, Tamil Nadu, Uttarakhand, and Andhra Pradesh.

Similarly, road tax for electric four-wheelers is completely waived in most of the country, with the exception of Gujarat and Kerala, where buyers must pay 50% of the total road tax, and Uttar Pradesh, where buyers must pay 75% of the road tax.

Additionally, electric vehicles in all states have been exempted from registration fees. MoRTH (Ministry of Road Transport and Highway) announced in August that battery-operated vehicles would be exempt from paying fees for the purpose of issuing or renewing registration certificates.

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