Gujarat recently rolled out its Electric Vehicle Policy 2021 with a detailed plan of action for a period of fours years starting from July 1, 2021. The policy encompasses the entire EV ecosystem by offering subsidies –the highest in India so far – to EV procurement, setting up of charging infrastructure and manufacturing of EVs and EV components in the state.
Transition to sustainable energy is no longer a subject of academic research and public speculation. Around the world, countries are working towards a goal of a greener future as the growing concern for climate change and its actual impact are becoming evident each passing day.
The industry that has gone full throttle for future mobility is the automotive segment, understandably so, as vehicular emissions are one of the major causes of environmental pollution. The manufacturing industry and the states are working in tandem to achieve sustainable goals, the former by the means of innovation and development of new technologies and the latter by devising frameworks and policies. India’s participation to this end has been quite proactive, both in terms of setting goals and the means to bring about a transformation in mobility.
Gujarat EV Policy 2021: Driving the State towards Future Mobility
Recently, the Government of Gujarat released the state’s Electric Vehicle Policy 2021, which comprehensively covers the state’s detailed plan of action with validity for a period of four years commencing from 1st July 2021.
Before going to the salient features of the policy, let us note some market reality indicators of e-mobility in Gujarat. EV registration in the state has already increased 27% in a little less than six months as compared to 2020. The state had only 176 electric vehicles in 2017 but the number has increased to 1,423 in 2021. The state road transport department began issuing green registration number plates to EVs about two months ago.
Policy Objective and Purpose
Gujarat Chief Minister Vijay Rupani unveiled the state’s EV policy which has its objectives laid out in a very categorical manner. They are four in number and goes like this:
- To drive Gujarat’s transportation sector towards electric mobility
- Making the state a manufacturing hub for electric vehicles and ancillary equipment
- Encourage start‐ups and investment in the field of electric mobility and associated support sectors such as data analytics and information technology
- Improving the quality of the environment by reducing air pollution.
The policy states that the state will support the purchase of the first two lakh electric vehicles, either under individual use or commercial use, for four years commencing from 1st July 2021. The segment wise policy targets are 1,10,000 2‐Wheelers, 70,000 3‐Wheelers and 20,000 4‐Wheelers. The benefits of meeting the target are over and above those already offered by the national FAME-II subsidy scheme.
Incentive at Three Levels
The bouquet of incentives mentioned in the policy is arranged to benefit three levels of EV transformation i.e., for early adoption, charging infrastructure and manufacturing of EVs and components.
For the consumer, the subsidy shall be disbursed directly to the customer via DBT mode from the State Transport Department on authenticating the document for the purchase of the vehicle. The incentives for all types of electric vehicles shall be based on the electric vehicle battery capacity. The state subsidy amount is Rs. 10,000 per kWh for 2 wheelers, 3 wheelers, 4 wheelers. The incentive of Rs 10,000 per kWh of battery capacity is the highest offered by any state in India.
To qualify for the incentive, the ex-factory price of an e-two-wheeler cannot exceed Rs 1.5 lakh. Similarly, the cap for e-rickshaws to be eligible is Rs 5 lakh, and for electric cars, it’s Rs 15 lakh. The user will get a one-time subsidy under any one scheme of the state government run by the different departments.
The incentives will be credited directly by the state transport department to the buyer’s bank account once the purchase document of the vehicle has been authenticated. Another benefit will be that the Gujarat government will also waive off the registration fee for buyers of electric vehicles, making them that much more affordable.
The charging infrastructure will get a great boost from the new policy. Commercial public EV charging stations for 2 wheelers, 3 wheelers and 4 wheelers will be eligible for 25 % capital subsidy on equipment/machinery and the subsidy for charging stations shall only be given to those developers, individuals or entities that have not availed subsidies under any other promotion schemes.
Petrol pumps will be allowed to set up charging stations if they comply with fire and safety standard norms. The promotion of charging infrastructure of different capacities/technologies will be through a variety of business models, and they include privately‐owned, State Distribution Licensees (DisCom) owned and Investor‐owned charging and battery swapping stations. Those who set up the first 250 commercial public EV charging stations will be eligible for a 25 per cent capital subsidy on equipment and machinery.
For the manufacturer of EVs and the components, the policy allows the entities to avail all provisions of the Gujarat Industrial Policy‐2020, subsequent applicable policies and government resolutions.
The Nodal Authorities
The policy has also identified the Ports and Transport Department shall be the Nodal Department and Energy and Petrochemicals Department, Government of Gujarat shall be the nodal agency. Gujarat Energy Research and Management Institute (GERMI) shall be the nodal Institute for research, training, incubation and other activities by providing a platform for various stakeholders.
Rapid Adoption of Electric Vehicle in Gujarat
The policy has met with great acceptance from the industry leaders of Gujarat. They feel the policy certainly has the potential to make Gujarat an EV hub and would mobilise a rapid adoption of electric vehicles. They noted that the state government is offering double the subsidy of any other state for every kWh, and it will make it a leading destination for electric vehicles and the support for charging infrastructure will accelerate the ecosystem development.
