Electric and Hybrid Cars – FAME, National Electric Mobility Mission, etc.

Telangana’s new EV policy

Explained | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.
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From UPSC perspective, the following things are important :

Mains level: Electric Vehicle policy;

Why in the News?

The Telangana government has decided to completely waive road tax and registration fees for people buying electric vehicles.

What are the key features of Telangana’s EV policy?

  • 100% Road Tax and Registration Fee Exemption: Electric two-wheelers, four-wheelers, and commercial vehicles (such as taxis, autorickshaws, electric light goods carriers, and buses) will be exempt from road tax and registration fees for the entire lifetime of the vehicle.
  • Exemption for Telangana State Road Transport Corporation (TSRTC): The exemption will apply to electric vehicles operated by TSRTC and buses owned by industries used for employee transport (not commercial purposes).
  • Validity Period: The exemption will be valid for two years, up to December 31, 2026, regardless of the number of vehicles registered.
  • Promotion of EV Awareness: The government is focused on spreading awareness about electric vehicle usage to reduce pollution levels and make Hyderabad pollution-free.
  • Support for Charging Infrastructure: Manufacturers of electric vehicles are encouraged to take the initiative in establishing charging stations to ensure convenience for users.

How will the government support the EV push?

  • The government will provide exemptions from road taxes and registration fees for various categories of electric vehicles to make them more affordable for consumers.
  • A meeting of the concerned departments (Transport, Home, HMDA, etc.) will be convened to ensure effective coordination and implementation of the EV policy.
  • Government representatives studied the policies of other states to come up with a policy tailored to Telangana’s needs, reflecting the best practices for EV adoption.

India’s New Electric Vehicle Policy 2024:

  • Duty Reduction: A customs duty of 15% is now applicable on imported EVs priced at $35,000 or above, significantly lower than the previous rates of 70-100%. This reduced rate will last for five years.
  • Import Limits and Investment Requirements: The policy allows for a maximum of 8,000 imported EVs per year, contingent on manufacturers investing at least ₹4,150 crore (approximately $500 million) in local production. There is no upper limit on investment, encouraging substantial financial commitments in the sector.
  • Local Manufacturing Mandate: Companies must establish operational facilities within three years and achieve a minimum domestic value addition (DVA) of 25% by that time, increasing to 50% by the fifth year. This aims to enhance local manufacturing capabilities.
  • Increased Import Allowance for Larger Investments: If a manufacturer invests over $800 million, they can import up to 40,000 EVs, still capped at 8,000 per year, with the option to carry over unused limits.
  • Bank Guarantees: A bank guarantee is required, which will be returned only upon meeting the DVA target and investment criteria.

Why special EV Policy is needed?

  • Environmental Goals: The EV policy is part of an effort to reduce pollution levels in Telangana, especially in Hyderabad, to prevent the city from facing pollution issues similar to those in New Delhi.
  • Lack of Implementation in the Past: Although the previous government introduced an EV policy for 2020-30, it was not implemented effectively. The new policy addresses this gap and actively promotes EV adoption.
  • Growing Need for Awareness and Infrastructure: The policy also aims to spread awareness about EVs and address infrastructure challenges, such as the availability of charging stations, which are crucial to making electric vehicles a viable alternative.
  • Encouraging Wider Adoption: The policy aims to increase the percentage of electric vehicles in the state (currently 5 out of every 100 vehicles are EVs) by offering financial incentives and creating an ecosystem that supports EV users.

Conclusion: Expanding and improving the availability of EV charging stations across the state is crucial to ensure the seamless adoption of electric vehicles, especially in urban areas and key highways.

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