The Indian government's 2030[1] vision for electric mobility strives for an 80% sales penetration for electric two-wheelers. The rising environmental concern, coupled with government incentives, has increased interest in electric vehicles (EVs). EVs are no longer a futuristic dream, but now, thanks to incentives, subsidies, and grants, a low-cost, practical means of sustainable transportation.
Key Government Incentives for Affordable EV Purchases
Affordable EVs are a reality due to various incentives offered by the Indian government:
● Purchase incentives: Buyers receive direct discounts on EV prices
● Coupons: Financial incentives that reimburse a portion of the expenditure
● Interest subventions: Reduced interest rates on EV loans
● Road tax exemption: Exemption from road tax
● Registration fee exemption: Waives the registration fee for new EVs
● Income tax benefits: Deductions on individual tax payments
● Scrapping incentives: Rewards for deregistering gas and diesel vehicles
● Other incentives: interest-free loans and supplementary subsidies
Recognizing the significance of charging infrastructure, the government has extended subsidies and grants under these categories in some Indian states ans union territories:
● Property tax rebates: Maharashtra and West Bengal
● Land concessions: Delhi, Bihar, and West Bengal[1]
● Capital subsidies: Gujarat, Karnataka, Maharashtra, Andhra Pradesh, Assam, Kerala, Madhya Pradesh, and Odisha
● Electricity exemption, revised tariffs, and reimbursement of upstream electricity infrastructure: Gujarat, Rajasthan[2] , Meghalaya[3] , Goa[4] , and Tamil Nadu[5]
Subsidies and Grants
Over the last five fiscal years, government EV subsidies[6] significantly boosted sales, achieving an impressive 20% on-year growth in most segments.
For those considering an electric two-wheeler in India, incentives are tied to the EV's battery capacity. A 2kWh battery capacity can qualify for an approximate incentive of INR 15,000 per kWh, up to 40% of the vehicle's cost.
Tax Exemptions and Rebates
Tax Deductions
Did you know purchasing an EV could earn you a substantial tax deduction?
Eligibility Criteria:
● Loan from a financial institution or non-bank financial institution (NBFC).
● Loans sanctioned between January 1, 2019, and March 31, 2023.
● EVs should operate solely with an electric motor powered by a traction battery and include an electric regenerative braking system.
Mechanism:
● Section 80EEB[7] allows up to INR 1,50,000 in tax savings on electric two-wheeler loan interest.
● Individuals can claim this deduction, and businesses can deduct up to INR 1,50,000.
● Interest payments exceeding this limit can be considered a business expenditure, contingent upon vehicle registration in the owner's or business entity's name.
Purchasing an affordable EV becomes a practical option when supported by a robust charging infrastructure and technology that minimizes waiting and downtime. The government has sanctioned Indian Oil (IOCL), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) to build 7,432 fast charging stations at their retail outlets. Furthermore, a draft policy[9] for battery swapping is in development, aiming to sell EVs without batteries, reducing upfront costs, and encouraging battery swapping technology through BaaS models.
Strategic funding for expressway and highway charging infrastructure, fast charging stations at oil company outlets, and 2,877 EV charging stations in 68 cities exemplify the government's commitment to accessible EV charging. These multifaceted efforts encapsulate a comprehensive approach that ensures accessibility for everyone, marking a pivotal step in promoting the widespread adoption of EVs. As the transition to sustainable mobility gains momentum, these initiatives reflect a forward-thinking vision and a resolute dedication to a greener, more energy-efficient future.
Caption: The Indian government has sanctioned funds for the widespread establishment of EV charging infrastructure
