Assam’s Electric Vehicle Policy 2021 Aims at 200,000 EVs to be Deployed by 2026

Assam is the latest Indian state to announce an electric vehicle (EV) policy. The Electric Vehicle Policy of Assam, 2021 aims for 25% EV penetration in all vehicle registrations by 2026.

Assam has followed Maharashtra, Delhi, and Gujarat, which have earlier launched state-specific EV policies. The policy comes into effect from September 4, 2021, for five years (2026) or until the announcement of a new or revised policy, whichever is earlier.

The state will target and support the deployment of the first 200,000 EVs – 100,000 electric two-wheelers (E2Ws); 75,000 electric three-wheelers (E3Ws); and 25,000 electric four-wheelers (E4Ws)- either for individual or commercial use during the five years.

The state also aims to convert 100% of its public transport bus fleet to electric buses and convert all government vehicles to EVS by 2030. As per the policy, only EVs would be sold in the state after 2025 as the state intends to phase out all fossil fuel-based commercial and logistics vehicles in all cities by 2030.

The policy also exempts registration charges and road tax on E2Ws, E3Ws, and E4Ws, coupled with a full waiver on parking charges for all EVs until 2026.

Demand-side incentives

The state is offering incentives based on the EV battery capacity to foster the transition to EVs,

E2Ws, E3Ws, and E4Ws would receive a subsidy of ₹10,000 (~$137)/kWh for a battery capacity of 2 kWh, 5 kWh, and 15 kWh capacity, respectively. The subsidies would be limited to ₹20,000 (~$274), ₹50,000 (~$685), and ₹150,000 (~$2,054) for E2Ws, E3Ws, and E4Ws, respectively.

The maximum ex-factory price to avail incentive for E2W is ₹150,000 (~$2,054), ₹500,000 (~$6,845), and ₹1.5 million (~$20,536) for E2Ws, E3Ws, and E4Ws, respectively.

Subsidy under Assam EV policy

According to the policy, the maximum subsidy is limited to 40% of the ex-factory price of the vehicle. The policy also provides a retro-fitment incentive of 15% up to  ₹15,000 (~$205) for E3W.

EV buyers are allowed to avail similar subsidies from only one program of the state government. However, there is no bar on availing subsidies or incentives under any central government program.

Supply-side incentives

Micro, small and medium units manufacturing EVs or EV components are eligible for a 20% subsidy on plant and machinery costs up to ₹1.5 million (~$20,536), ₹5 million (~$68,454), and ₹10 million (~$136,908), respectively.

Similarly, large units manufacturing EVs or EV components are eligible for a 10% subsidy on plant and machinery costs up to ₹100 million (~$1.36 million).

These subsidies are in addition to the 30% capital investment subsidy available under North East Industrial Development Scheme (NEIDS) 2017 or any subsequent policy from the central or state government.

Units manufacturing EV or its components are eligible for an additional interest subsidy of 2% on the working capital loan, in addition to the 3% interest subsidy on working capital loan available under NEIDS 2017 or any subsequent policy from central or state government.

Charging infrastructure incentives

Commercial public EV charging stations for E2W, E3W, and E4W are eligible for 25% capital subsidy on equipment subject to a maximum limit of ₹1 million (~$13,691) per station. The incentive will be provided to the first 500 commercial public EV charging stations.

Petrol Pumps are also permitted to set up EV charging stations, provided they follow fire and safety norms issued by the competent authorities.

The state government would exempt 90% of electricity duty on EV charging stations while 10% electricity duty would be borne by the entrepreneurs through the policy duration.

Buyback incentive

EV owners can deposit vehicle batteries that have reached their expiry at any charging point or swapping station landfills and, in return, get a remunerative price for the battery. Disposal of EV batteries in any other manner, such as scrap, will not be allowed.

A nodal agency will be appointed to act as an aggregator to purchase EV batteries that are at least 70% of rated capacity. These batteries will be purchased from the charging points and battery swapping stations and re-used as power banks to store renewable energy.

Batteries procured in such a manner will be auctioned to renewable generators within and outside Assam. The nodal agency would publish the purchase price of end-of-life batteries every month based on auction prices along with a margin for the agency, the charging points, and battery swapping stations.

Last month, the Odisha Government announced its Electric vehicle (EV) Policy, 2021, which aims to accelerate EV adoption, especially in the E2W, E3W, and E4W categories. The state aims to achieve 20% of all vehicle registrations to be EVs by 2025. The policy will be valid for five years.

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