Chhattisgarh’s EV Policy Targets 15% of all Vehicles to be Electric by 2027

Listen to this article

The Chhattisgarh State Electric Vehicle Policy, 2022 aims to accelerate the adoption of electric vehicles (EV), especially in the two-wheeler, public/shared transport, and goods carrier segments. It has targeted 15% of all vehicle registrations to be battery electric vehicles (BEV) by 2027.

The policy will be valid for five years from April 2022 and extendable to 10 years.

The state’s Transport Department will be responsible for planning, implementation, and review of the policy.

Purchase and scrapping incentives, waiver of road tax and registration fees, the establishment of a wide network of charging stations and swappable battery stations, and the development of a publicly-owned database have been proposed in the policy.

Purchase incentives

The state’s purchase incentives are driven by the goal of minimizing the viability gap between an internal combustion vehicle and an EV.

The state will offer financial support up to 10% of the cost of the vehicle (excluding tax) or ₹150,000 (~$1,883) whichever is lower, for the purchase of EVs, either for individual use or commercial use, for five years until 2026-27.

Hybrid EVs will be eligible for a 50% purchase incentive provided to fully electric vehicles.

A 100% waiver of road tax on all the EVs purchased will be available during the first two years from the commencement of the policy. There will be a 50% and 25% waiver on road tax on EVs purchased during the next two years and one year, respectively.

Additional incentives

Accelerating the pace of EV adoption, especially in the mass-user category, is at the heart of the policy. Currently, two-wheelers constitute 81% of the total number of vehicles registered in the state.

Chattisgarh EV Policy 01

A 50% subsidized parking for all personal EVs, and additional monetary aid for those who wish to switch to EVs through a dedicated transportation fund, will be offered. Registration fees on the purchase of two, three, and four-wheelers will be fully exempted during the policy period.

Manufacturing incentives

The government aims to make Chhattisgarh a manufacturing hub for EVs and create employment opportunities in the sector. The policy encourages local investors and manufacturers to collaborate with multinational agencies to boost the supply of EVs and set up charging infrastructure.

A state EV Fund will function exclusively, and all the incentives under the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006, will be extended to the manufacturers under the industrial policy until 2024.

The government will allocate 500-1,000 acres of land to develop EV Parks with plug-and-play internal infrastructure, common facilities, and external infrastructure.

Developers of auto clusters and automotive manufacturing centers specific to EVs will be provided financial assistance of 50% of fixed capital investments, up to a maximum of ₹200 million (~$2.51 million).

New MSME EV battery manufacturing units will be provided financial assistance up to 25% of the capital investment made in plant and machinery subject to an upper limit of ₹10 million ($125,436).

Chhattisgarh EV Policy 02

As part of the capital subsidy of fixed capital investment (FCI), 25% of FCI up to a maximum of ₹1.5 million (~$18,831) for micro industries, 20% of FCI up to a maximum of ₹4 million (~$50,217) for small and ₹5 million (~$62,700) for medium industries will be provided.

Additionally, 10% of FCI up to a maximum of ₹100 million (~$1.26 million) for the first two units under large industries, in each segment of EV, battery, and charging equipment, and 10% of FCI up to a maximum of ₹200 million (~$2.51 million) for first two units, under the mega category, in each segment of EV, battery and charging equipment will be provided.

The policy also proposes tax, stamp duty, tariff incentives, and other policy support for EV manufacturing.

Charging infrastructure incentives

The policy proposes a capital subsidy of 25% to the selected public or private energy operators on charging equipment/machinery to the first 300 fast charging stations commissioned in the state up to a maximum of ₹ 1 million (~$12,553) per station.

Recycling Ecosystem and reuse

Since EVs are prone to outlive the batteries that power them, and each EV needs two batteries for a ten-year life span, the state has devised a proactive plan for battery recycling and reuse.

Energy operators and battery swapping operators will operate as end-of-life battery recycling agencies. A nodal agency will be appointed to facilitate and monitor the sale and purchase of EV batteries.

The government will also encourage the setting up of recycling businesses in collaboration with battery and EV manufacturers for ‘urban mining’ of rare materials within the battery for reuse.

Government think tank NITI Aayog issued the draft battery-swapping policy addressing the key technical, regulatory, institutional, and financing challenges to help India develop battery-swapping ecosystems to unlock the large-scale adoption of battery-swapping.

Recently, Odisha, in its EV policy, set a target of achieving 20% of all vehicle registrations to be EVs by 2025.