Maharashtra EV policy 2021 comes in to effect, prices of EVs to drop

The much-debated Maharashtra electric vehicle (EV) policy 2021 finally came into effect after the state government revised it in order to accelerate EV sales and stimulate manufacturing. The updated Maharashtra EV policy aims to capitalize on the recent policy and technology developments and further the state’s EV ambition, while prioritizing public and shared transport, goods carriers and two-wheelers to drive the adoption of EVs. However, this policy will apply exclusively to BEVs, while mild-hybrids and plug-in hybrid electric vehicles are not covered under the new policy.

The primary objective of Maharashtra EV Policy 2021 is to accelerate the adoption of BEVs in the state so that they contribute to 10 per cent of new vehicle registrations by 2025. Moreover, the policy also includes achieving 25 per cent electrification of public transport and last-mile delivery vehicles by 2025, converting 15 per cent of the Maharashtra State Road Transport Corporation’s (MSRTC) existing bus fleet to electric, promoting the establishment of at least one Gigafactory for the manufacturing of advanced chemistry cell (ACC) batteries in the state, and promote research and development (R&D), innovation, and skill development across the EV ecosystem in the state.

The Government of Maharashtra will provide fiscal incentives, and subsequently, to the buyers of EVs in the state. The incentives are linked to the vehicle type- two-wheelers, three-wheelers, four-wheelers and buses. The vehicle models approved under the FAME II scheme will be eligible for these incentives and state incentives will be provided in addition to FAME II incentives. The buyers purchasing the EVs before December 31, 2021 shall be eligible for an ‘Early bird discount’ of Rs 5,000/kWh on the vehicle’s battery capacity. This discount shall be provided over and above the demand incentives. The maximum early bird discount availed per vehicle shall be capped at Rs 1 lakh. For vehicles sold without a battery, 50 per cent of the incentive amount shall be provided to the vehicle OEM and the remaining incentive amount shall be provided to the battery swapping energy operator for defraying the cost of any deposits that may be required from the end user for the use of the type approved swappable battery, type approved along with corresponding OEM vehicle. The vehicle OEMs should pass on all the incentive benefits to the EV buyers.

The Maharashtra EV policy 2021 also exempts all the EVs sold in the state from road tax till the duration of the policy. As per the Ministry of Road Transport and Highways’ notification, all the EVs sold in the state shall be exempted from the payment of fees for the purpose of issuing or renewal of a registration certificate. Moreover, the vehicles eligible for demand incentives under this policy will also be eligible for the scrappage incentive, which ranges from Rs 7,000 to Rs 25,000 depending on the vehicle. The state will also encourage financial institutions and banks to offer preferential interest rates for EV customer segments like e-autos, goods carriers, and taxis.

The Maharashtra EV policy 2021 also offers incentives for extended battery warranty and buyback agreements. The policy will provide OEMs with additional incentives for offering a minimum 5-year warranty for batteries. The OEMs who offer buyback schemes for vehicles which are up to 5 years old at a value reduced by not more than 7.5 per cent 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 Rs 12,000.