States’ Support for India’s Growing EV Industry
India is a growing country that welcomes new advanced technologies for a bright future in all aspects. Additionally, the country has introduced electric mobility and is growing rapidly. And the acceptance of electric vehicles is increasing day by day.
Across India, the EV sector has garnered a broad positive response, with some Indian states leading the way. And in this article, we discuss the top Indian states that are leading EV adoption. Electric vehicle manufacturers and other companies operating in this space have expanded their services and created their own spaces covering different regions of the country. And while major companies try to maintain a higher position than their competitors, competition is fierce.
As the world moves toward a greener future, Indian states have been at the forefront of EV adoption. They are revolutionizing commutes through innovation, sustainable infrastructure, and a visionary approach.
India has made remarkable strides in promoting e-mobility. In addition to state-level FAME II programs, 26 states have also announced EV policies aimed at promoting the introduction of EVs and the manufacture of EVs and components. These regulations will increase demand for electric vehicles, expand production, and provide various incentives to develop charging station infrastructure to achieve this. 16 of the 26 states’ EV regulations were introduced between 2020 and 2022. 8 have been in force for at least two years, making Goa the only state regulation without a current regulation.
“Analysis of State Electric Vehicle Policy and Its Impact,” the latest study by Climate Trends, examines state EV policy enforcement based on 21 parameters, including retirement incentives, targets and resource allocation, job creation, and infrastructure goals.
Climate Trends is a research-based capacity-building and advice initiative focused on environmental challenges, climate change, and sustainable development. This study helps governments identify critical policy gaps and develop proposals to fill them when policies change.
“Our research shows that few government policies balance EV sales, manufacturing, and overall ecosystem growth. Climate change impacts are slowing, but this needs to be addressed through better regulation, enhanced monitoring, stakeholder mechanisms, and capacity building across the policy value chain,” said Arti Khosla, Climate Change Director.
The report cited guidelines for Maharashtra, Haryana, Delhi, and Uttar Pradesh as being the most thorough as they covered the widest range of factors. Punjab follows these states. Arunachal Pradesh’s policy is the least comprehensive, considering only 3 of the 21 parameters specified.
Manipur and Himachal Pradesh follow, covering the following five and six parameters respectively. Only 7 elements are covered in Ladakh, Kerala, and Uttarakhand.
States with the most demand-side incentives
The states with the greatest demand stimulus for consumers are Delhi, Orissa, Bihar, Chandigarh, Andaman, and Nicobar. These states offer motor vehicle tax and registration fee exemptions, initial cost subsidies for motorcycles, tricycles, automobiles, and FAME II. They also offer incentives for refurbishing or scrapping vehicles, and toll incentives for charging.
Five out of eight parameters are considered in this incentive category, followed by Maharashtra, Haryana, Rajasthan, and Meghalaya.
States with the least favorable demand-side incentives
Manipur, Andhra Pradesh, and Arunachal Pradesh have only one type of demand-side stimulus. Andhra Pradesh and Manipur exempt only road tax and registration fees, while Arunachal Pradesh subsidizes two-, three- and four-wheeled vehicles.
Karnataka, Himachal Pradesh, Tamil Nadu, Gujarat, Madhya Pradesh, and Kerala offer only two of the eight features being considered in this incentive category.
States offer the best EV investment incentives
In addition to those included in state industrial policies, the strongest supply-side incentives can be found in Tamil Nadu, Haryana, and Andhra Pradesh. These states also offer incentives to support manufacturing within the state. Additionally, these states provide employment incentives, skills development support, infrastructure development incentives, and dedicated budgets to encourage research and development within the state. Next are Punjab and Uttar Pradesh.
Six of the 27 states (Maharashtra, Delhi, Uttar Pradesh, Rajasthan, Meghalaya, and Gujarat) have budgets for the distribution of stimulus packages. Nine states, including Chandigarh, West Bengal, and Andhra Pradesh, have mandated charging infrastructure installation in existing housing estates, offices, parking lots, and shopping malls.
Arunachal Pradesh is the only state without a designated destination for electric vehicle sales, manufacturing, and charging infrastructure. Andhra Pradesh, Telangana, Tamil Nadu, Bihar, Karnataka, and Himachal Pradesh are among the states that have set targets for EV job creation.
Bihar will be the only state to reach the overall target of 100,000 EV penetration by 2024. But the main reason is the increasing sales of electric tricycles. Targets for all other vehicle segments, including electric buses, two-wheelers, and four-wheelers, are well behind.
Pawan Mulkutra, Director of Integrated Transport, Electric Mobility and Hydrogen at WRI India commented on the report: About 25 states/UTs have shared their EV guidelines, and he has 4-5 more at the draft stage. Change is desired at the state level. What is most needed now is the effective design and implementation of these policies, considering the unique characteristics of each state.
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