Road tax exemptions and subsidies for electric vehicles in each state in India

Cost— one word in four letters is one of the major obstacles to electric vehicles. Alongside the lack of the required infrastructure, the automobile industry in India has continued to depend primarily on the internal combustion engine. Automobiles powered by an electric motor are substantially more costly than those powered by an internal combustion engine (ICE). As a result, several states have implemented financial incentive programs for users of electric vehicles. Purchase incentives for electric vehicles are being offered by the Indian government at both the central and state levels. Our focus in this post is on electric two-wheelers and four-wheelers in India’s different states, so stay tuned. Find out more about Indian government incentives for electric vehicles by continuing to read this article.

India’s government has made a concerted effort in the last two years to boost the market share of electric vehicles (EV). Many states are eliminating registration fees and road taxes as part of the FAME-II plan, which offers incentives to users.

However, because each state has its own set of requirements for electric vehicle subsidies, the benefits are more significant in certain areas than in others, pushing EVs closer to being a viable option for the general public. So what Indian state provides the greatest subsidies for buying an electric vehicle? Let’s dig a little deeper into this.

100% raod tax relief states

Subsidies to consumers’ capital, subsidies to users, or incentives to generate demand. 100%  of road taxes are exempted in Delhi, Maharashtra, Meghalaya, Gujarat, Assam, Bihar, West Bengal, Odisha, Uttar Pradesh, Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, and Punjab, amongst other states.

For electric two-wheelers, Gujarat and Kerala have a 50% tax and Madhya Pradesh a 99% tax, while for four-wheelers (electric cars and SUVs), both states have similar policies, with the exception of Uttar Pradesh, which offers a 75% tax exemption on electric four-wheelers.

Leading the way in terms of the highest subsidy available in Delhi, which offers an incentive of Rs 5,000 per kWh, and a maximum of Rs 30,000 (provided the battery is bigger than 5 kWh). Second on the list currently is Maharashtra, which, too, offers a subsidy of Rs 5,000 per kWh, with the total subsidy capped at Rs 10,000. However, with an early bird incentive (of up to Rs 15,000; valid only till 31 December 2021), the total subsidy for any electric two-wheeler with a 3 kWh (or bigger) battery would be eligible for is Rs 25,000.

Just like with two-wheelers, electric cars and SUVs, too, are subsidized by state EV policies. However, the total number of vehicles covered under these policies is significantly lower. Electric cars have significantly larger batteries and are eligible for a substantial amount of money in the form of subsidies. Most states have capped the total number of electric cars to be subsidized at 10,000 units. The ex-factory cost limit for eligible vehicles is pegged at Rs 15 lakh, which means at present, it’s only the Tata Tigor EV Ziptron and the Tata Nexon EV that qualify for incentives in all states. Larger, more expensive EVs – including the likes of the MG ZS EV and Hyundai Kona Electric – do not qualify for these subsidies.

On the four-wheeler front, it is Maharashtra that currently leads the way. The base incentive of Rs 5,000 per kWh is the same as for electric two-wheelers, but the maximum subsidy is capped at Rs 1.50 lakh. However, with the early bird incentive (of up to Rs 1 lakh) accounted for, the total subsidy amount rises to Rs 2.50 lakh.

While we’re on the subject of road tax exemptions, let’s have a look at the subsidies for electric vehicles in each of the states listed above.

Let’s have a look at some of the electric 2-wheelers with their prices