Maharashtra Among The Top 5 States With Most Comprehensive EV Policy Designs: Study

By Outlook Planet Desk February 17, 2023

Using 21 factors, a new study by Climate Trends called Analysis Of State Electric Vehicle Regulations And Their Impact assesses the thoroughness of the state EV policies

Maharashtra Among The Top 5 States With Most Comprehensive EV Policy Designs: Study
The inclusion of startups and MSMEs within the PLI ambit will certainly augur well for the industry. DepositPhotos

India has made significant strides towards boosting e-mobility. In addition to the FAME II programme at the state level, 26 States have also published electric vehicle policies with the goal of promoting EV adoption and EV and component manufacturing. These regulations provide a number of incentives to generate EV demand, boost production, and develop the infrastructure for charging stations in order to do this. 16 of the 26 State EV policies were introduced between 2020 and 2022, eight have been in effect for at least two years, and Goa is the only state policy that no longer exists.

Analysis Of State Electric Vehicle Policies And Their Impact is a new study by Climate Trends, that evaluates the thoroughness of these state EV policies based on 21 parameters like scrappage incentive, targets and funding allocation, job creation, mandates for infrastructure etc. 

Climate Trends is an effort for capacity building and consultancy based on research with a focus on environmental, climate change, and sustainable development challenges.

This research intends to assist governments in recognising significant policy gaps and offering suggestions to fill them when these policies are changed. 

“Our study shows that few state policies have comprehensive designs that balance EV sales, manufacturing, and overall ecosystem growth. There are gaps in implementation, leading to slower on-ground impact, which need to be addressed through better regulation, improved monitoring, mechanisms and capacity building of stakeholders across the policy value chain.” says, Aarti Khosla, Director, Climate Trends.

In the report, the policies of Maharashtra, Haryana, Delhi, and Uttar Pradesh have emerged as the most thorough because they cover the broadest range of factors. These states are followed by Punjab. 

The policy for Arunachal Pradesh is the least comprehensive because it only addresses three of the 21 specified parameters.

Manipur and Himachal Pradesh follow, covering the next five and six parameters, respectively. There are just seven factors covered by Ladakh, Kerala, and Uttarakhand.

 States with the most demand-side incentives 

The states with the most demand-side incentives for consumers are Delhi, Odisha, Bihar, Chandigarh, and Andaman & Nicobar. These states offer road tax and registration fee exemptions, upfront cost subsidies for 2, 3, and 4-wheel vehicles, as well as FAME II, incentives for retrofitting or scrapping vehicles, and tariff incentives for charging electricity.

Following closely behind with five of the eight parameters taken into account for this category of incentives are Maharashtra, Haryana, Rajasthan, and Meghalaya. 

States with the least favourable demand-side incentives

Manipur, Andhra Pradesh, and Arunachal Pradesh only provide one type of demand side incentive. Only the road tax and registration cost are waived in Andhra Pradesh and Manipur, whereas Arunachal Pradesh provides subsidies for 2, 3, and 4 wheel vehicles.

Only two of the eight characteristics taken into consideration for this category of incentives are offered by Karnataka, Himachal Pradesh, Tamil Nadu, Gujarat, Madhya Pradesh, and Kerala.

States offering the best incentives for EV investment

The strongest supply side incentives, in addition to those included in the state's industrial policy, are found in Tamil Nadu, Haryana, and Andhra Pradesh. These states also offer unique incentives to support manufacturing in the state. These states additionally provide employment incentives, support for skill development, infrastructure development incentives, and a dedicated budget to promote R&D in the state. Punjab and Uttar Pradesh are next in line. 

Out of the 27 states, 6 (Maharashtra, Delhi, Uttar Pradesh, Rajasthan, Meghalaya, and Gujarat) have budgets set aside to distribute incentives.

Chandigarh, West Bengal, Andhra Pradesh, and other nine states have mandated the installation of charging infrastructure in new residential complexes, offices, parking lots, malls, etc.

The only state without a set goal for EV sales, manufacture, or infrastructure for charging them is Arunachal Pradesh.

​​Andhra Pradesh, Telangana, Tamil Nadu, Bihar, Karnataka, and Himachal Pradesh are among the states that have set goals for EV job creation.

By 2024, Bihar will be the only state to have reached its overall goal of EV penetration of 100,000 units. However, the main reason for this is an increase in the sales of electric three-wheelers. The goals for all other vehicle segments, including e-buses, two-wheelers, and four-wheelers, remain far behind.

Commenting on the report, Pawan Mulukutla, Director, Integrated Transport, Electric Mobility and Hydrogen, WRI India said, “Sub-national aspirations are key to achieving India’s decarbonization goals. Till now, about 25 states/UTs have notified their EV policies while another 4-5 policies are in the draft stage. Clearly, there is a strong appetite for change at the state level. The critical need now is effective design and implementation of these policies that take into account the specific and unique characteristics of each state.”