Maha’s New EV Policy Offers Subsidy to Buyers

The Maharashtra government announced a new electric vehicles promotion policy that provides subsidy to buyers to drive up demand for EVs in the state.

The Maharashtra EV Policy 2021 will provide incentives of ₹5,000 per kilowatt-hour (kWh) of battery capacity to buyers of all types of electric vehicles. The subsidy will be directly transferred to the beneficiaries within 30 days.

For those who buy EVs by December 31 this year, there will be an additional ‘early bird discount’ of ₹5,000 per kilowatt-hour.

The scheme is valid till March 31, 2025 and by then aims to convert 10% of all new vehicles sold in the state to electric. It also aims to convert 25% of all last-mile logistics vehicles to electric.

The policy also includes a waiver of road tax and registration charges for vehicles sold under the policy. Other demand-side subsidy include providing incentives to manufacturers to extend a five-year warranty for the batteries and assured buyback schemes to bolster consumer confidence.

Scrappage of old combustion engine vehicles to buy EVs would also be incentivised. However, with the caveat that the manufacturer of the new EV purchased would also have to match the scrappage subsidy given by the government.

This comes after Delhi and Gujarat governments announced their own state EV policies that had demand-side incentives on top of the Centre’s FAME-2 (Faster Adoption and Manufacturing of Electric vehicles) scheme.

The EV industry expects these demand incentives to shore up sales significantly.

These measures could help bridge the gap between consumers being aware of EVs and their willingness to buy these vehicles, according to Sohinder Gill, director general, Society of Manufacturers of Electric Vehicles (SMEV), which is an EV industry lobby.

Beyond subsidies for buyers, Maharashtra’s EV policy also includes incentives for setting up public 15,000 slow and 500 fast public chargers in the state.

Moreover, benefits under the D+ category of mega projects will be provided to new EV, and related manufacturing units set up in the state. The state government wants to attract at least one Gigafactory for the manufacturing of advanced cells, which is part of the production-linked incentives scheme announced by New Delhi.