Electric mobility is the leading driver of India’s green mobility mission. To set in motion the National Electric Mobility Plan and fulfil the commitment to reduce India’s emission intensity by 35 per cent below the 2005 levels by 2030, the central government has pushed state governments to rapidly frame and implement their electric vehicle (EV) policies. Between 2017 and 2020, 15 states notified or drafted their EV policies. Several states and union territories such as Delhi, Rajasthan and Gujarat have already announced their EV policies. The Odisha government, too, announced its Electric Vehicle Policy, 2021, in August 2021. The policy has been framed with the objective of transforming Odisha into a model state for EV adoption. This can be achieved by rapid adaptation, research and development (R&D), and employment opportunities for various stakeholders in the value chain.
Renewable Watch takes a look at the objectives, incentives and features of the new policy, and its likely implications for the future…
Objectives, incentives and features
The Odisha EV Policy, 2021 has been framed with the broad objective of accelerating the adoption of EVs, especially in the categories of electric two-wheelers (E2), three-wheelers (E3) and light motor vehicles (LMVs). The state targets 20 per cent battery EV registrations by 2025. The promotion of EV manufacturing and its components, including batteries, is also a key focus of the policy mandate. To keep up with the rapidly evolving mobility sector, an effective implementation mechanism has been put in place, with a dedicated EV cell for day-to-day implementation and monitoring of the policy. The incentives under the policy aim to promote all EV segments among the general public.
To support the mainstreaming of EVs, the policy will facilitate innovation and R&D in electric mobility technologies. It will implement measures to facilitate the creation of jobs in various EV segments such as driving, sales, manufacturing and charging. The Odisha government also plans to set up a battery assembly plant in partnership with lithium cell manufacturers.
The financial incentives under the policy can be characterised as demand-side incentives, supply-side incentives and incentives for charging infrastructure. To incentivise the purchase of EVs, a 15 per cent subsidy will be offered on E2, E3 and LMVs, up to a maximum of Rs 5,000, Rs 12,000 and Rs 100,000 respectively. For e-buses, a subsidy of 10 per cent will be given, up to a maximum of Rs 2 million. For the first 5,000 electric goods carriers, a purchase incentive of Rs 30,000 will be provided. Apart from this, interest subvention in loans, exemptions in road tax and registration fee waivers will be provided.
To support start-ups, new micro and small enterprises (MSEs) will receive up to 25 per cent capital investment in plant and machinery, with an upper limit of Rs 10 million. Further incentives have been provided for new MSEs owned by scheduled castes, scheduled tribes, differently abled, women and diploma holders. An additional 5 per cent capital investment subsidy will be given to new MSEs set up in industrially backward areas.
For charging infrastructure, the Odisha government will provide a grant of up to Rs 5,000 to purchase charging equipment for the first 20,000 private charging points. A capital subsidy of 25 per cent will be offered to select operators for charger installation. A special subsidy will also be given to the first 500 EV charging stations. A special focus area of the policy is the scrapping and recycling of e-waste. Batteries installed in EVs will be clearly labelled, specifying their chemistry. The possibility of collaboration with existing e-waste management agencies will be explored. A well-defined policy for recyclers will also be introduced by the Industries Department, in consultation with the Forest and Environment Department and the State Pollution Control Board.
With less than 10 years remaining to achieve the target of 30 per cent EVs in India’s mobility fleet by 2030, proactive participation of the state governments will be a key driving factor. Depending solely on market forces to achieve the transition to EVs as per the desired timeline may not suffice.
Rapid urbanisation in India has been accompanied by a rapid increase in transport emissions, with road transport contributing about 87 per cent to total emissions. A greater push towards EVs from all stakeholders is necessary to significantly cut down carbon emissions and reduce pollution levels in Indian cities. Transport decarbonisation will also help bring down India’s dependence on oil imports, saving crucial foreign exchange for the country. The transition to EVs can thus not only create a better environment, but can also improve energy security in India.