Uttar Pradesh Releases Draft EV Manufacturing Policy

With an eye on the future, the Uttar Pradesh state government has created a roadmap for promoting the development of EV vehicle manufacturing capacity in the state, called the Draft Uttar Pradesh Electric Vehicles (EVs) Manufacturing Policy 2018.

Uttar Pradesh claims to be the third largest beneficiary under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME program), with 16,038 EVs on the road. The vehicle total is largely comprised of 2-wheelers with a maximum power of 250 watts and below, followed by 4-wheelers.

The FAME program is a part of the National Electric Mobility Mission Plan (NEMMP), which aims to promote the adoption of eco-friendly vehicles in country.

In the draft policy document, the Government of Uttar Pradesh outlines special incentives and concessions to attract investments in EV manufacturing capacity, EV battery manufacturing and assembling capacity, and the development of charging and swapping infrastructure for EVs in the state in line with the state’s Industrial Investment and Employment Promotion Policy (IIEP), 2017.

The Uttar Pradesh Electric Vehicles Policy 2018 is set to come into effect on the date of its notification and remain in force for 5 years.

The policy is aimed at making Uttar Pradesh a preferred destination for investment in EV manufacturing capacity. The policy seeks to create employment opportunities on both the supply and demand sides of the market; create an environment that is conducive to shifting from internal combustion engines to EVs; encourage the use of hybrid EVs in Uttar Pradesh; and develop human capital and augment power capacity to meet the needs of the EV industry.

The draft policy document says that Uttar Pradesh has India’s largest consumer base, implying that its EV market is poised to grow substantially.

With this in mind, the state is determined to strengthen and expand its industrial base and has launched the IIEP Policy 2017. Going forward, the EV Manufacturing Policy would support the expansion of an eco-friendly automobile industry in Uttar Pradesh and open up a market for EV manufacturing in the state that supports targets set by the Government of India.

Under the proposed EV Manufacturing Policy, if at any stage a situation arises which calls for an amendment to or supersession of the policy, only the cabinet would be authorized to approve such amendments or supersession. In the case of any amendment to the policy, any package of incentives that was already committed to by the state government to any unit would not be withdrawn and the unit would continue to be entitled to the benefits. This brings certainty to the markets and investors.

The state government plans to make industrial land available for the development of EV charging infrastructure and EV manufacturing capacity in clusters and zones. Under the plan, EV Incubation centers will be set up at IIT-Kanpur and other leading engineering institutions would facilitate EV mobility and encourage EV business models. The Startup Fund created by the UP Startup Policy 2017 would also be used to promote EV startups.

To promote the development of private EV parks, the state government also plans to provide an interest subsidy in the form of the reimbursement of up to 50 percent of the annual interest on loans taken to buy land; an interest subsidy in the form of the reimbursement of up to 60 percent of the annual interest for seven years on loans taken for building supporting infrastructure at private EV parks; and an interest subsidy in the form of the reimbursement of up to 60 percent of the annual interest for seven years on loans taken to build hostel or dormitory-style housing for workers.

The state government will also provide a 100 percent road tax exemption for EVs purchased in Uttar Pradesh. It will also provide a 30 percent subsidy on the road price of EVs in the form of a reimbursement to individual families with a single-girl child in the state that purchase of EVs.

Service units which set up charging stations using a capital investment that is greater than ₹2.5 million (~$38,500) but less than ₹50 million (~$0.77 million) will be provided with a capital interest subsidy of 5 percent per annum for five years. That subsidy will be provided in the form of reimbursement for the interest on loans made for the procurement of plants and machinery as well as the setting up of charging infrastructure. The maximum allowable subsidy in such cases would be ₹1 million (~$15,400) per annum per unit.

Service units that set up charging stations with a capital investment of less than ₹2.5 million (~$38,500) will be provided with a capital interest subsidy of 5 percent per annum for five years in the form of reimbursement on loans for the procurement of plants and machinery as well as the setting up of charging infrastructure. The maximum allowable subsidy in such cases would be ₹0.2 million (~$3,080) per annum per unit.

Meanwhile, all defined service units would be eligible for a 100 percent exemption from paying the electricity duty for 10 years.

The draft policy document also calls for providing developers with incentives for setting up common Effluent Treatment Plants (ETP) at Private Electric Vehicle (PEV) Manufacturing/Assembling Parks. These developers would be eligible for 50 percent reimbursement of the interest paid on loans taken to set up such common purpose ETPs for seven years, subject to a maximum ceiling of ₹50 million (~$0.77 million) per project.

The release of the draft EV policy by the Uttar Pradesh state government comes less than a month after the Government of India unveiled its own National E-Mobility Program. The program is in line with India’s vision of achieving 100 percent e-mobility by 2030, and it aims to provide an impetus to the entire e-mobility ecosystem, including vehicle manufacturers, charging infrastructure companies, fleet operators, and service providers.

In the recent past, Karnataka and Maharashtra also launched their own EV policies that provide various subsidies and incentives to consumers.

Previously, Mercom also reported that the EV market in India is slowly gaining momentum after three years of relative inaction. However, India still lags far behind other nations when it comes to EVs.

Saumy Prateek Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.