States with Attractive Subsidies Under Their EV Policies

Highlights :

  • The EV transition is truly on in India, with states joining the centre to attract buyers and manufacturers even.
  • Subsidies have cut down the gap between EV’s and ICE vehicles to less than 20 percent in many cases, strengthening the case for EV’s at a time of high fuel prices.
States with Attractive Subsidies Under Their EV Policies Himachal Pradesh Sets Sights on Becoming Green Energy State by March 2026

States with new or modified Ev policies giving subsidies over and above the central government’s subsidies under FAME II.

The country is in a constant hustle to ramp up EV adoption. Although the central government has brought up schemes like Faster Adoption and Manufacturing of Electric Vehicles (FAME I and FAME II). Recently the government has extended its ambitious scheme to promote electric mobility by two years till 31 March 2024. Also, DHI (Department of Heavy Industries) has increased the demand incentives under FAME II by 50 percent (at Rs 15,000 per kWh) for the electric two-wheeler (E2Ws). 

As EVs reach 1.3 percent of total vehicle sales in India in the FY20-21, the only way is a steep climb from here on. Especially with fuel prices being kept on a high floor, thanks to high taxes and duties imposed by the government.   

Considering the key role of the auto sector, states in the country have moved to add their own incentives for EV adoption and manufacturing. The list comprises states like Bihar, Karnataka, Telangana, Uttar Pradesh, Andhra Pradesh, Kerala, Uttarakhand, Tamil Nadu, Delhi, Maharashtra, Gujarat, Goa, and now Rajasthan. A total of 13 states have notified their EV Policies as of now but we are going to discuss the ones that have recently been modified or released/drafted their EV Policies. 


Following Maharashtra and Gujrat, Rajasthan has also released its new EV policy 2021. It brings incentives for electric two-wheelers with a battery capacity of up to 2 kWh of Rs 5,000. Models with a battery capacity of 2 to 4 kWh will be provided with a Rs 7,000 incentive, those with a battery capacity of between 4 to 5 kWh will receive a Rs 9,000 incentive while e-two-wheelers with a battery capacity of over 5 kWh will be eligible for a Rs 10,000 incentive. All of these incentives are additional to the center’s FAME II incentives for E2Ws. 


Following the footsteps of various states, the Maharashtra government has also extended its EV policy till March 31, 2025. The state policy will now offer incentives ranging from a maximum of Rs 2,75,000 for 4 wheelers to Rs 5 lacs for chargers. Subsidies will be available for the first 100,000 E2W buyers, who are eligible for an incentive of Rs 5,000 per kWh of battery capacity (incentive limit: Rs 10,000; twice the previous cap of Rs 5,000). There is also an early bird incentive of up to Rs 15,000 (for an E2W with a 3 kWh battery) for those who purchase it before 31 December 2021. This means buyers will be eligible for a total benefit of Rs 25,000 this year. For electric four-wheelers or cars, with a per KW subsidy of Rs 5000, applicable for capacity till 30 kW, making a total incentive of Rs 1.5 lakh. Early bird incentive will also be provided with an additional incentive of up to Rs 1 lakh for those buying before December 31, 2021. Additionally, there is a Rs 7,000 scrappage incentive to nudge people to upgrade to an EV faster.


Gujarat brought its EV policy with an aim of becoming a hub for manufacturing EVs and various related materials to encourage electric mobility. The state will be providing subsidy support double the amount of subsidies in any other state for EVs on a per kilowatt basis over four years. Gujarat will provide up to Rs 20,000 subsidy on E2Ws, 50 thousand for E3Ws, and up to 1.5 lakh for four-wheelers/cars. Also, the subsidy amount will be directly credited to bank accounts through DBT. The state announced the installation of 250 additional EV charging stations and provided a 25 percent capital subsidy with a limit of Rs. 10 lakh for charging stations, under the new EV Policy.


Delhi Government launched its EV policy in August 2020, however, the government is deliberately bringing modifications to it. Like adding scrapping incentives, including up to Rs 7,500 per vehicle for auto and light commercial vehicles, under Delhi EV Policy 2020. The policy offers Rs 5000/kWh subsidy on E2Ws, subject to a maximum limit of Rs 30000. This means the maximum subsidy you could get in Delhi would be Rs 15000. The state also offers a subsidy of up to Rs 30000 on E3Ws, and Rs 1.5 lakh on electric four-wheelers/cars. Delhi has exempted the registration fee and road tax for EV buyers within the state. 


Goa has just unveiled the draft of its ‘Goa Electric Mobility Promotion Policy 2021’ which aims to have 30% of annual vehicles registered in Goa, starting from the year 2025, accounted by electricity. The policy also aims to give Financial Incentives including Purchase incentives, Scrapping incentives, and Interest subvention on loans, along with a waiver on road tax and registration fees.

Incentives to units engaged in manufacturing of EVs, batteries, EV components, EVSE, etc., shall be applicable as a capital subsidy of up to 20% of Fixed Capital Investment (FCI), 100% net SGST reimbursement for 5 years, and 100% stamp duty exemption will be provided to Pioneer, Mega, and Ultra-Mega units manufacturing EVs.

A capital subsidy of 30% of the cost of capital provided the subsidy on building/office is restricted to Rs 5 lakh will be provided to micro manufacturing MSME units while Rs. 10 lakhs will be provided to small and medium MSME units. 

A purchase incentive of Rs. 10,000/kWh of battery capacity shall be provided per vehicle to the registered owner and subject to a maximum incentive of Rs. 30,000 per vehicle for E2Ws. Under the policy, a scrapping incentive up to Rs. 5,000 for the owner of ICE two-wheeler. 

A purchase incentive of INR 30,000 per vehicle shall be provided to the registered owner for the purchase of one E3W or E-rickshaw or one E-cart per individual. 

A Purchase Incentive of INR 10,000/kWh of battery capacity shall be provided per electric four-wheeler/car (subject to a maximum incentive of Rs.1,50,000 per vehicle) to the registered owners of e-cars to be registered in Goa after the notification of this policy. Additionally, the state government will provoke all electricity infrastructure costs, up to Rs.8,00,000 associated with the installation of charging stations. 

Let’s wait for other states to come up with their EV policies, it will be interesting to know what they have in their bags.

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Bhoomika Singh

Bhoomika is a science graduate, with a strong interest in seeing how technology can impact the environment. She loves covering the intersection of technology, environment, and the positive impact it can have on the world accordingly.