The Maharashtra Government has announced the Draft Electric Vehicle (EV) Policy, 2021. The policy aims to support the adoption of sustainable and clean mobility solutions in Maharashtra. The recommended policy will be valid until March 31, 2025, from the day of its public notification, following which it will be reviewed and extended.

The primary objective of the draft policy is to accelerate the adoption of EVs in the state so that they can contribute to 10% of new vehicle registrations by 2025.

The EV policy aims to foster the manufacturing of EVs in the state through a set of supply-side initiatives to attract investments, facilitate the establishment of manufacturing units, and encourage the production of EVs, EV components, including Advance Chemistry Cell (ACC) batteries, and EV supply equipment.

The draft policy aims to achieve 25% electrification of public transport in the five targeted urban clusters in the state by 2025. The proposed policy also aims to convert 15% of the Maharashtra State Transport Corporation’s existing bus fleet to electricity during the policy period.

Also, the proposed policy aims to establish a gigafactory for the manufacturing of ACC batteries in the state.

According to the draft policy, the state plans to achieve the target of 10% electric two-wheelers (E2Ws), 20% electric three-wheelers (E3Ws), and 5% electric four-wheelers (E4Ws) out of the total vehicle registrations in the state by 2025. Also, the policy aims to achieve at least 25% of the urban fleet operated by fleet aggregators or operators in the state to transition to EVs by 2025.

The state government also plans to develop 1,500 public and semi-public charging stations in Greater Mumbai, 500 charging stations in Pune, 150 charging stations in Nagpur, 100 charging stations in Nashik, 75 charging stations in Aurangabad, 30 charging stations in Amravati, and 20 charging stations in Solapur in the next five years.

The draft policy further plans to equip expressways of Mumbai-Nashik, Mumbai-Pune, Mumbai-Nashik, and Nashik-Pune with complete EV infrastructure.

Also, starting April 2022, all new government vehicles operating within major cities would be electric.

Demand incentives for EVs

The vehicles approved under the Faster Adoption and Manufacturing of Electric Vehicles in India Phase-II (FAME II) program would be eligible for incentives. The Maharashtra government will provide an incentive of ₹5,000 (~$67)/kWh for E2Ws in the L1 and L2 categories, and the number of vehicles to be incentivized during the policy period will be 100,000. The maximum incentive per vehicle will be ₹10,000 (~$134).

For E3W autos in the L5M category, the government will provide an incentive of ₹5,000 (~$67)/kWh, and the number of vehicles to be incentivized is 15,000. The maximum incentive per vehicle for E3W autos in the L5M category will be ₹30,000 (~$402). L5M category includes passenger carrier (auto-rickshaw) with gross vehicle weight equal to 1,500 kilograms.

Also, for electric cars in the M1 category (motor vehicles used for carrying passengers, having no more than eight seats in addition to the driver’s seat), an incentive of ₹5,000 (~$67)/kWh will be provided, and the number of vehicles to be incentivized is 10,000. The maximum incentive per electric car will be ₹150,000 (~$2,011).

For E4W goods carriers in the N1 category (motor vehicles used for carrying goods and having a gross vehicle weight not exceeding 3.5 tons), an incentive of ₹5,000 (~$67)/kWh will be provided for 10,000 such vehicles. The maximum incentive per vehicle will be ₹100,000 (~$1,340).

An incentive of 10% of vehicle cost will be provided to 1,000 e-buses. The maximum incentive per e-bus will be ₹2 million (~$26,818).

The draft policy also states that buyers purchasing the EVs (except e-buses) before December 31, 2021, will be eligible for an ‘early bird discount’ of ₹5,000 (~$67.05)/kWh of the vehicle battery capacity. The maximum early bird discount per vehicle has been capped at ₹100,000 (~$1,340).

For vehicles sold without batteries, 50% of the incentive amount will be provided to the original equipment manufacturer (OEM). The remaining incentive amount (up to 50%) will be provided to the battery swapping energy operator to incur the cost of any deposits required from the end-user to use the type-approved swappable battery along with the corresponding OEM vehicle.

Scrappage incentive

All the EVs sold in the state will be exempted from road tax until the duration of the policy. The vehicles eligible for demand incentives under this policy will be eligible for the scrappage incentive.

For E2Ws, the scrappage incentive will be up to ₹7,000 (~$94), and for E3Ws, the scrappage incentive will be up to ₹15,000 (~$201). For E4Ws, the incentive will be up to ₹25,000 (~$335).

Buyback incentive and battery warranty incentive

OEMs who offer buyback programs for vehicles that are up to five years old at a value reduced by not more than 7.5% per year of the age will be eligible for additional incentives. An OEM can avail both the incentives simultaneously. However, the total incentive amount will be limited to ₹12,000 (~$161).

The assured buyback guarantee will be 6% of the total vehicle cost capped at ₹10,000 (~$134). For a battery with a warranty of at least five years, the warranty incentive will be 4% of the total vehicle cost capped at ₹6,000 (~$80).

Charging infrastructure incentives

The charging station will be eligible for the incentives only after the commencement of the station’s operation. The operational guidelines will define the eligibility criteria for availing of these incentives. Public and semi-public charging stations availing of FAME II charging infrastructure will not be eligible for these benefits.

For the slow type of public charging stations, the state government will provide an incentive of 60% of the cost, and the maximum incentive available will be ₹10,000 (~$134). The maximum number of charging stations to be incentivized is ₹15,000 (~$201). For moderate and fast charging public charging stations, the incentive amount will be 50% of the cost of the charging station, and the maximum incentive available will be ₹500,000 (~$6,704), with the maximum number of public charging stations to be incentivized being 500.

The tariff applicable for all the EV charging stations and battery swapping stations in the state will be as per the order issued by Maharashtra Electricity Regulatory Commission.

The Government of Maharashtra will implement a time-bound, single-window process for installing EV connections that offer EV-specific tariffs.

Urban local bodies of all National Clean Air Program (NCAP) cities should prepare a charging infrastructure plan for their cities to cater to 2025 levels of EV penetration. The plan should identify charging station locations and land parcels available with different government and land-owning agencies that could be made available for charging infrastructure installation at concessional rentals.

The 15th Finance Commission (FCC) has allocated a grant to 42 NCAP cities for 2020-21 to improve air quality as per their approved city action plans. The FCC has allocated the grants to six cities in Maharashtra. Funds will be made available from this FCC grant in the NCAP cities to support the distribution companies in setting up the charging infrastructure and the upstream infrastructure upgradation.

Supply-side incentives

Incentives will be provided to make the state more lucrative for setting up manufacturing and R&D facilities related to EVs (component manufacturing, vehicle assembly, battery assembly, cell manufacturing, electronics parts manufacturing, recycling of EVs, and EV batteries).

The Government of Maharashtra will also offer competitive incentives that will significantly enhance and complement the incentives offered under the Government of India’s production-linked incentive program.

The state also aims to create an ecosystem for environment-friendly scrapping of vehicles (including EVs). It plans to prepare a State Scrapping Policy, which will be notified in due course by the Transport Department of Maharashtra.

In partnership with the interested OEMs and service providers, the Government of Maharashtra will develop skill enhancement centers for delivering vocational courses on the EV ecosystem.

Other Aspects

The policy will aim to fast-track and ensure time-bound registration of EVs, including EV fleets owned by aggregators, last-mile delivery providers, and logistics players.

All the EVs in the state will be registered with green number plates, irrespective of vehicle type.

No permits will be required for e-autos per the Ministry of Road Transport and Highways’ notification, and it will be strictly implemented.

The policy will encourage fleet aggregators to operate EVs, as per the Motor Vehicle Aggregator Guideline, 2015, issued by the Ministry of Road Transport and Highways.

The policy also states that new residential buildings will be mandated to have at least 20% of the total parking spaces as EV ready, of which 30% will be in the common parking spaces or parking spaces unallotted to any individual residence owner.

All dedicated off-road public parking spaces should convert at least 25% of their total capacity to be EV-ready by 2023.

The Government of Maharashtra is also planning to create a State EV Fund. The fund will be used to promote EV adoption, including providing incentives for EVs and EV infrastructure. The ‘State EV Fund’ will aggregate the funds allocated from different instruments like green tax and green cess.

Recently, the Goa government issued the draft ‘Goa Electric Mobility Promotion Policy, 2021’. The policy would be enforced for five years, from the date of its notification in the official gazette.

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