States Offering Most Subsidies for Electric Vehicles

The subsidies that are offered by different states are mentioned in the table below:

Telangana 

In the state of Telangana, the electric vehicle policy was rolled out in 2020. It offers 100% exemption on registration and road tax for all categories of electric vehicles. However, no kind of subsidies is being offered. The state government is currently studying the restructured FAME scheme and the policies offered by other states.  

It needs to be mentioned here that strong supply-side incentives such as capital investment subsidy of up to Rs.30 crore, power tariff discount and interest subvention of up to Rs.5 crore, and SGST reimbursement of up to Rs.5 crore per year is being offered by the state.  In addition to that, tailor made benefits to mega and strategic projects on a case-to-case basis are also offered.

Karnataka 

Karnataka government which has recently launched the electric bike taxi scheme was the first state in the country to launch an electric vehicle policy. It was launched in 2017.  

If you buy an electric vehicle in the state, subsidy under the central government' FAME scheme can be availed while for investing in the EV sector 15 percent capital subsidy can be availed. It must be noted here that the state plans to replace 50% of the state government vehicles with electric in the coming years. 

Maharashtra

When it comes to consumers and manufacturers, the electric vehicle policy of Maharashtra is the most recent and friendly one. This is because the state offers an incentive of Rs.5000/kWh for all vehicle categories along with an early bird discount of Rs.5000/kWh. 

The maximum subsidy you can get for electric two-wheelers is Rs.10,000 while for three-wheelers and four-wheelers, the subsidy is Rs.30,000 and Rs.1,50,000. For electric buses, the subsidy is Rs.20 lakh. 

Maharashtra also offers subsidy for scrapping your old petrol two-wheeler. You can get subsidy up to Rs.7,000 for purchasing a new electric two-wheeler by scrapping your old petrol vehicle. Automobile companies are provided incentives by the state government for providing a 5-year battery warranty to customers. 

Delhi

Delhi, which launched the electric vehicle policy in 2020 is in the process of making some slight changes even though its policy is the most comprehensive one in the country.

One of the tweaks which is proposed is including guidelines for an electric bike taxi scheme like the one introduced by the Karnataka government. It needs to be mentioned here that Delhi government offers subsidy of Rs.5,000/kWh on electric two-wheelers, which is subject to a maximum of Rs.30,000.

For electric three-wheelers and cars, the subsidy offered is Rs.30,000 and Rs.1.5 lakh respectively. In addition to that, the government also offers scrapping incentives in the range of Rs.5,000 to Rs.7,000, waiver of registration charges and road tax on e-vehicles.

Gujarat 

The maximum subsidy you can avail for purchasing an electric two-wheeler is Rs.20,000 while for three-wheelers and electric cars, the state has capped the maximum subsidy at Rs.50,000 and Rs.1.5 lakh respectively. 

On the charging front, Gujarat is offering a maximum subsidy of Rs.10 lakh with the aim of setting up about 528 charging stations in the state. While the state government hasn't waived off the road tax on electric vehicles, it has announced a waiver of registration charges. 

While a variety of factors like charging stations, battery life, and running cost force buyers to think twice before buying an electric vehicle in India, it is getting easier as many states in the country are coming up with EV policies, waiver of road tax, registration charges, and offering subsidies. With the introduction of Ola Electric and Tesla launching its sales, these are exciting times for the country's EV sector. 

What is FAME Subsidy?

Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India (FAME) is a government-sponsored incentive programme for electric vehicles. It was introduced in 2013 as part of the National Mission on Electric Mobility 2011/National Electric Mobility Mission Plan 2020.

The main features of this scheme are as follows: 

1. The FAME I scheme's first phase was first authorised for a two-year period beginning on 1 April 2015. 
2. The EV subsidy scheme was subsequently increased in regular intervals after that. The most recent extension of FAME's first phase was till 31 March 2019. 

1. The Demand Incentive Disbursement Mechanism is the underlying framework for the FAME scheme. 

What is FAME II Subsidy?

The second phase of the EV subsidy scheme is referred to as FAME II. With an initial investment of Rs.10,000 crore for three years beginning in April 2019, the government launched this incentive scheme.

Here are the key features of FAME II: 

1. A total of 10 lakh electric two-wheelers, 55,000 electric cars, 5 lakh electric three-wheelers, and 7,000 electric buses will be supported under this scheme. 
2. The EV subsidy programme was recently extended till March 2024. 

1. For an electric car, the maximum incentive amount is Rs.1.5 lakh. 
2. The subsidy for electric two-wheelers has been raised in the updated FAME II scheme. 
3. The limit on subsidies was raised from 20% to 40% of the price of the vehicle. 
4. The incentive for two-wheeler EVs was hiked from Rs.10,000 per kWh to Rs.15,000 per kWh.  
5. The subsidy for four-wheeler EVs is unchanged at Rs.10,000 per kWh. 

How Does FAME Subsidy Work?

FAME provides up-front incentives with an aim of encouraging the usage of battery-powered vehicles.

The working of FAME is explained below: 

1. You must first buy an electric vehicle that qualifies for the FAME subsidy. 
2. The Original Equipment Manufacturer (OEM) must register for the FAME programme in order to provide the incentive. Any OEM is that is not registered will not be able to offer the subsidy. 
3. The price of an EV will be quoted by the dealer after the subsidy amount has been deducted.  

1. After completion of the purchase, the dealer will send the OEM the purchase information. 
2. The OEM will then send this information to the National Automotive Board (NAB), which oversees the subsidy scheme. 
3. The incentive will be credited to the OEM after verification.  
4. The dealer will be sent the subsidy amount by the OEM. 

Eligibility Criteria for FAME II Subsidy 

The FAME II subsidy is available for electric two-wheelers and cars.

When buying an electric vehicle, you should understand the specifics of the subsidy programme: 

1. SUVs and electric vehicles are both eligible for the subsidy. The ex-factory price, however, is limited to Rs.15 lakh. 
2. Electric two-wheelers below Rs.1.5 lakh qualify for the FAME II subsidy scheme. 
3. Battery-powered two-wheelers having a minimum top-speed of 40 km/h and a minimum range of 80 km are eligible for this scheme. 

Government Subsidy on Commercial Electric Vehicles 

The FAME scheme was designed to promote the production and sale of commercial electric vehicles like e-rickshaws and e-buses in addition to the electric car subsidies in India. Vehicle emissions, a problem that major cities are facing, will be reduced as e-mobility is introduced into the public transport system.

For commercial vehicles, the following government subsidies are offered: 

1. To boost the purchase of electric buses, an incentive of Rs.20,000 per kWh to state transport units (STU) is offered. OEMs may, however, put the subsidy up for bid. 
2. The technology, battery capacity, and the price all play a role in determining the precise amount of commercial vehicle subsidies. 
3. Electric three-wheelers priced less than Rs.15 lakh qualify for incentives. 

Importance of Subsidy Scheme 

The price is one of the primary causes of the slow EV sales in India. Owning an electric vehicle has much higher initial costs than owning a conventional vehicle. The absence of charging infrastructure is the second main barrier to adopting electric vehicles. Resolving these issues will pave the way for electric vehicles in India. 

The points below detail how the incentive scheme might increase electric vehicle sales in India:

1. Manufacturers of electric vehicles can lower the cost of their vehicles because of the FAME incentives. The lower the cost of EVs, the more the number of buyers.  
2. The additional state incentives reduce the price of electric vehicles substantially and close the gap between them and conventional vehicles. 
3. The FAME programme aids commercial vehicles along with private vehicles. This will encourage state governments to buy more electric vehicles for public transport. 
4. Electric vehicles are a viable alternative to conventional vehicles due to attractive state and central government subsidies. 

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