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Maharashtra EV Policy 2021 and differences with Gujarat’s, explained

Details on the most comprehensive, state-issued EV policy yet, which, among other things aims to achieve 25 percent electrification of public transport by 2025.

July 14, 2021 / 04:03 PM IST

The newly unveiled Maharashtra EV Policy 2021 is designed to fast track the EV adoption process with big targets and daunting deadlines for the state government. The policy aims to overhaul both public and private transport infrastructure, with the aim of electrifying 10 percent of all vehicles registered by 2025.

The incentives, much like other state EV policies, are applicable across the board with two, three and four-wheelers receiving heavy price cuts in the form of subsidies and tax rebates. Along with this, Maharashtra is also keen on establishing itself as one of the key manufacturers of EVs, while electrifying their public transport infrastructure to a great extent, all by 2025.

Officials from the transport department have stated the funds for the incentives will come primarily from the green tax levied on polluting vehicles. In what is clearly the most ambitious state-driven EV policy yet, at least 25 percent of vehicles for fleet aggregators, e-commerce companies and logistics operators are intended to be electrified by 2025.

What does the policy say about infrastructure?

Maharashtra’s Additional Chief Secretary of (Transport) Ashish Singh said the state intends to be one of the top producers of battery-driven EVs in the future, with a target of one gigawatt of battery manufacturing capability. Part of the policy’s extensive infrastructure overhaul includes 1500 charging stations in the Mumbai metropolitan region, 500 in Pune, 150 in Nashik and an additional 225 to be spread out between Nashik, Aurangabad, Amravati and Solapur.

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In addition to the extensive charging network and a gigafactory, the state intends to electrify all major state highway networks to make them completely EV-ready by 2025. The state environment minister Aditya Thackeray who spearheaded the revised policy initiatives, also stated that all vehicles for state government officials will be EVs from 2022.

Part of the government’s Rs 930 crore EV roadmap, is to achieve 25 percent electrification in intra-city public transport in Mumbai, Aurangabad, Pune, Nagpur and Nashik. The policy will also aim to electrify 15 percent of the 18,000 Maharashtra State Road Transport Corporation buses fleet.

What are the key differences from the Gujarat EV Policy?

While the incentives offered in the Maharashtra EV policy, in certain instances, are less than those offered by Gujarat, there are certain “early bird incentives” placed to catalyse the adoption process. Applicable to two, three and four-wheelers, these incentives allow those purchasing a battery EV before December 31, 2021, to avail additional incentives depending on the type of vehicle.

While there’s a basic subsidy of Rs 5,000 per kwh of the battery on all kinds of EVs, the maximum incentive cap differs for two and three-wheelers – capped at Rs 10,000 and Rs 30,000 respectively – and four-wheelers (capped at Rs 1.5 lakh).

However, there is an early bird discount of Rs 2,500 per kwh of the vehicle battery capacity, that will be offered in addition to the existing basic incentive. Therefore, if an electric two-wheeler with a battery capacity of 3kwh is availing a basic incentive of Rs 10000, it is eligible for an additional discount of Rs 15,000 if the purchase is made before December 31, 2021.

Similarly, if a four-wheeler is purchased before the cutoff date, the buyer is entitled to a basic subsidy of Rs 30,000 (available to buyers after December 31st also) and an additional early-bird subsidy of up to Rs 35,000.

What is the subsidy for electric two-wheelers?

Much like the Gujarat EV policy, the Maharashtra policy aims to boost electric two-wheeler sales the most. The policy has been devised to incentivise the purchase of 100,000 electric two-wheelers – a considerably higher number compared to the 15,000 e-autos and 10,000 electric four-wheelers.

In addition to this, e2w makers will receive an additional incentive of up to 12,000 for offering a minimum five-year battery warranty (two years more than the current warranty offered by brands like Ather Energy and Bajaj) and a guaranteed buyback scheme. It’s unconfirmed if said brands aim to immediately extend their warranty period.

Once in place, these incentives collectively amount to a total of Rs 37000, all of which will be provided directly from the manufacturer, with the customer only tasked with the regular purchasing formalities. In addition to this, petrol two-wheeler owners switching to electric EVs will get Rs 7,000 as scrappage incentive, adding the total discount to Rs 44,000.

While e2W makers haven’t revealed the revised prices yet, the estimated drop in prices for the likes of the Ather 450x, currently priced at Rs 1.42 lakh, cost under a lakh. Much like the e2w, electric three-wheelers are also eligible for buyback guarantees and battery warranty incentives up to Rs 12,000, with the total incentives (basic + early bird + scrappage + buyback) adding up to Rs 92,000.

What is the subsidy for electric four-wheelers?

The subsidy offered here is also similar to the Gujarat EV policy, with an incentive of Rs 5,000 per Kwh being offered to EVs with a maximum battery capacity of 30kwh. Unlike the Gujarat EV policy which set a cap of EVs priced under Rs 15 lakh, the Maharashtra policy focuses on battery capacity instead, but the result, as things stand remains the same. At present only the Tata Nexon EV with a battery capacity of 30.2 kwh qualifies for a subsidy (of Rs 1.5 lakh) while the likes of the Hyundai Kona and the MG ZS EV (with a battery capacity of 39 kwh and 44.5 kwh, respectively) are exempted from any form of rebate, apart from the road tax waiver and registration charge waiver.

For cars that are eligible, there is another “early bird” discount of an additional Rs 1 lakh if the cars are purchased before December 31, 2021. With a maximum basic incentive of Rs 1.5 lakh (Rs 5,000 x 30) and an additional Rs 1 lakh (inapplicable post-January 2022) the total incentives can drop the price of the Nexon and Tigor EV by a good Rs 2.5 lakh.

While there’s no buyback incentive for cars, a scrappage incentive for those switching from fossil fuel cars brings the total subsidy to Rs 2.75 lakh. The subsidies are applicable only to the first 10,000 buyers until any amendments are made to the policy.

What about property and other tax rebates?

While the Gujarat EV policy waived off any registration fee one might have to incur at an RTO, the Maharashtra EV policy has waived off any road tax an EV owner has to pay, for the duration of the policy (currently set for the next four years). In addition to this, the government officials stated that property developers, both commercial and private, will be required to reserve minimum parking space for EVs.

The state government will also provide property tax rebates for installing private charging infrastructure within society premises. The details and extent of these rebates are yet to be specified.

Charging station rebates

The policy also highlights rebates for those intending to set up public charging stations. For those intending to set up the first 15,000 AC or slow-charging stations, there is an incentive of up to Rs 10000 per charger. Those investing in a fast-charging station, the first 500 of them anyway, will be entitled to a subsidy of Rs 5 lakh per charger.

The discrepancy also highlights the massive gap in costs between setting up slow charging stations, which cost roughly Rs70,000 for a Bharat AC-001 charging station and Rs 240000 for a Bharat DC-001, in accordance with the minimum infrastructure requirements as per the Government of India.

The incentives offered differ from the Gujarat EV policy, which announced a 25 per cent capital subsidy of up to Rs 10 lakh per station for the first 250 PCS in the state. However, Maharashtra’s charging station target of 2500 (fast and slow) to be set up over the next four years, is considerably higher than that of any other state.

Industry response

Obviously, those leading the charge on the EV front, are pretty chuffed about the policy. Tarun Mehta, CEO of Ather Energy has said that the incentives offered for both the demand and supply side will accelerate the adoption and the manufacturing of EVs in the country. “In addition to demand incentives, the policy also incentivizes buy-back and vehicle scrappage,” he told BusinessLine newspaper.
Parth Charan is a Mumbai-based writer who’s written extensively on cars for over seven years.
first published: Jul 14, 2021 04:03 pm

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