Electric Vehicle Policy and Incentives

Electric vehicles (EVs) are becoming increasingly popular as a means of transportation, and governments around the world are implementing policies and initiatives to promote their adoption. These efforts are being supported by a variety of subsidies, tax credits, and other incentives that make EVs more affordable for consumers. As more countries implement successful EV policies and initiatives, we can expect to see continued growth in the adoption of electric vehicles.

In this newsletter, we explore the following topics:

1. Government Support: Provide an overview of government initiatives and policies that promote electric vehicle adoption.

2. Incentive Programs: Share information about available subsidies, tax credits, and other incentives to encourage EV purchases.

3. Global Perspectives: Discuss successful EV policies and initiatives from different countries around the world.

Government Support: Initiatives and policies

There are many government initiatives and policies that promote electric vehicle adoption around the world. Here are some examples:

• The National Electric Mobility Mission Plan (NEMMP) launched in 2013 is a governmental mission providing a roadmap for the faster adoption of electric vehicles in the nation and their manufacturing in the country to achieve national fuel security. The plan is projected to save 9500 million litres of crude oil which is equal to INR 62,000 crores.
• The FAME India (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India) scheme was launched in 2015 under the NEMMP to provide financial incentives for the purchase of electric and hybrid vehicles. The scheme was extended in 2019 as FAME II with a budget of INR 10,000 crores for three years. FAME II aims to support the deployment of 10 lakh electric two-wheelers, 5 lakh electric three-wheelers, 55,000 electric four-wheelers and 7,000 electric buses.
• The Production Linked Incentive (PLI) scheme was approved in 2020 to boost domestic manufacturing and attract large investments in the sectors of advanced chemistry cell (ACC) battery, electronic/technology products, automobiles and auto components. The scheme has an outlay of INR 18,100 crores for ACC battery manufacturing and INR 57,042 crores for automobiles and auto components. The scheme is expected to increase the production of electric vehicles and reduce their cost by promoting localization of battery and other components.
• The Vehicle Scrappage Policy was launched in 2021 to phase out old and unfit vehicles that cause pollution and increase fuel consumption. The policy aims to create an eco-system for scrapping of end-of-life vehicles and encourage the replacement of old vehicles with new and energy-efficient ones. The policy offers incentives such as scrap value, registration fee waiver, road tax rebate and GST concession for the purchase of new vehicles after scrapping old ones.
• Along with the central government, many state governments have also announced their own EV policies to provide additional benefits and support for the adoption of electric vehicles. Some of the states that have EV policies are Delhi, Gujarat, Maharashtra, Karnataka, Tamil Nadu, Kerala, Andhra Pradesh, Telangana, Uttar Pradesh and Bihar. The state policies offer various incentives such as subsidy, exemption from road tax and registration fee, preferential parking, charging infrastructure development and demand creation for electric vehicles.

Incentive Programs

There are various incentives available for electric vehicle purchases in India, both at the national and state levels. Some of the incentives are:

• Tax deductions on loan for EVs: Under section 80EEB of the Income Tax Act, individuals can claim a tax deduction of up to Rs 1.5 lakh on the interest paid on loans taken to buy electric vehicles. This deduction is applicable for both four-wheeler and two-wheeler electric vehicles. The loan should be taken from a financial institution or a non-banking financial company (NBFC) between April 1, 2019, and March 31, 2023.
• Purchase incentives under FAME II: The central government provides direct subsidies to the buyers of electric vehicles under the FAME II scheme. The subsidy amount depends on the battery capacity of the vehicle and is capped at a certain percentage of the vehicle cost. The subsidy rates and caps are as follows:

• State-level incentives: Many states have also announced their own EV policies to provide additional benefits and support for the adoption of electric vehicles. Some of the state-level incentives are:

Global Perspectives

Electric vehicles (EVs) are gaining popularity around the world as a cleaner and more efficient alternative to conventional vehicles. Different countries have adopted various policies and initiatives to promote the adoption of EVs and support their development. Here are some examples of successful EV policies and initiatives from different countries:

• India: India is an emerging EV market, with over 1.5 million electric two-wheelers and over 160,000 electric three-wheelers on the road in 2020. India has launched several policies and initiatives to promote EV adoption and manufacturing, such as the National Electric Mobility Mission Plan (NEMMP), the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, the Production Linked Incentive (PLI) scheme, the Vehicle Scrappage Policy and various state-level EV policies. India also has a growing EV industry, with companies such as Tata Motors, Mahindra Electric and Ola Electric expanding their production capacity and product portfolio.
• Norway: Norway is the world leader in EV adoption, with over 75% of new car sales in 2020 being EVs. Norway has implemented a range of policies to make EVs more attractive and convenient for consumers, such as exemption from purchase tax, value-added tax, road tax, toll fees, ferry fees, parking fees and access to bus lanes. Norway also has a well-developed charging infrastructure, with over 13,000 public charging points and over 3,000 fast chargers.
• China: China is the largest EV market in the world, with over 4.5 million EVs on the road in 2020. China has adopted a comprehensive policy framework to support the development and deployment of EVs, including subsidies, tax incentives, fuel economy standards, new energy vehicle (NEV) mandates, local production requirements, charging infrastructure development and preferential policies for public transport and mobility services. China also has a strong domestic EV industry, with over 400 manufacturers and a leading position in battery technology.
• United States: The United States is the second-largest EV market in the world, with over 1.7 million EVs on the road in 2020. The United States has a mix of federal and state-level policies to encourage EV adoption, such as tax credits, rebates, grants, loans, regulations, targets and incentives. The United States also has a vibrant EV innovation ecosystem, with leading companies such as Tesla, General Motors and Ford investing in EV research and development.

If you're thinking about making the switch to an electric vehicle, I highly recommend it. It's one of the best decisions I've ever made.

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