UP Govt announces New Electric Vehicle Policy-2022 to attract investments & promote faster EV adoption in state

New Delhi: With the aim to promote faster adoption of environment-friendly clean mobility solutions and create a conducive ecosystem for Electric Vehicles (EVs) in Uttar Pradesh, Uttar Pradesh government has announced State’s New Electric VehicleManufacturing and Mobility Policy 2022.

The main objective of the policy is not only to create an eco-friendly transportation system in the state, but also to make Uttar Pradesh a global hub for the manufacturing of electric vehicles, batteries and associated equipment.
With a primary objective to contribute to India’s Net Zero target for 2070, the policy also aims to fulfil State’s aspiration of becoming a trillion-dollar economy by leveraging its potential and opportunities in the EV industry.

Therefore, the policy aims at attracting investment of more than Rs 30,000 crore and generate direct and indirect
employment for over one million people. In this direction, the policy provides for three-pronged attractive incentive regime that includes benefits to consumers for purchasing EVs; to manufacturers of EV, EV batteries and related components; and to service providers developing charging/ swapping facilities.

Incentives for EV buyers

Since Uttar Pradesh is one of India’s largest consumer market, the policy also providesm attractive subsidies to the buyers in order to open up the electric vehicle market in the State. This includes 100% road tax and registration fees exemption during the first three years of effective period of the policy on all segments of electric vehicles
purchased and registered in Uttar Pradesh. The same exemption will apply in the fourth and fifth year also on all segments of EV, if the vehicle is purchased, registered as well as manufactured in Uttar Pradesh. Also,
the policy provides an attractive Purchase Subsidy Scheme with a total budget outlay of Rs 500 Crores, which will be notified for a period of one year on all the segments of electric vehicles.

This includes 15% subsidy on factory cost for purchasing two-wheeler EV up to maximum Rs 5,000 per vehicle subject to first 2 lakh EVs purchased; up to maximum Rs 12,000 per three-wheeler EV subject to maximum first 50,000 such EVs purchased; upto Rs 1 lakh per four-wheeler electric vehicle subject to maximum of first 25,000 EVs purchased; upto Rs 20 lakh per E-Bus (Non-Govt) subject to maximum of first 400 such E-Buses; and 10% subsidy on factory cost for purchasing E-Goods Carriers upto Rs 1,00,000 per vehicle to maximum first 1000 E-Goods
Carriers purchased. On the other hand, government employees will be encouraged to buy EVs, for which advance will also be allowed by the State Government.

Incentives for EV and EV battery and related component manufacturers

Moreover, the policy provides for enabling provisions to attract big ticket investments in EV Battery and EV manufacturing. The new policy provides capital subsidy at the rate of 30% on investment subject to
maximum Rs 1,000 Crores per project to maximum first two Ultra Mega Battery

Projects, investing Rs 1,500 Crores or more each for setting up battery manufacturing plant in the State of minimum production capacity of 1 GwH. Similarly, capital subsidy at the rate of 20% subject to maximum Rs 500 crores per
project has been provided to maximum of first five Integrated EV Projects, investing Rs 3,000 crores or more each for setting up a manufacturing facility in the State for EV, EV Battery and related component manufacturing, including R&D and testing facilities.

MSME projects are being provided capital subsidy upto maximum Rs 5 Crores per project, while large projects are being provided capital subsidy upto maximum 90 Crores per project. In order to incentivise high production, the capital subsidy provided is being linked to the multiple of utilisation of production capacity in the policy, where for utilising production capacity more than 75%, multiple of 1 will be provided, while for utilising production capacity between 40%-75%, multiple of 1 will provided proportionately. Also, the policy provides stamp duty reimbursement to the manufacturers, which is at the rate of 100% to Integrated EV Project & Ultra Mega Battery project for setting
up facility anywhere in the State, and at the rate of 100% in Purvanchal & Bundelkhand region, 75% in Madhyanchal & Pashchimanchal (except Ghaziabad and Gautam Buddh Nagar district) and 50% in Ghaziabad and Gautam Buddh Nagar district to Mega/ Large/ MSME projects.

The Policy also provides reimbursement of quality certification charges subject to maximum Rs 10 lakhs per project; reimbursement of patent registration fees subject to maximum Rs 50,000 per project for acquiring domestic patent and maximum Rs 2 lakh per project for acquiring international patent; and reimbursement of stipend as skill development subsidy at the rate of Rs 5,000 per employee per year to a maximum of first 50 employees in a year.

Furthermore, incentives have been provided for setting up Centre of Excellence (CoE) by government organizations or Public Sector Undertakings or Private companies in the field of electric vehicles as grant of 50% subject to maximum Rs 10 crores per project to a maximum of 5 such projects.

Incentives for EV Charging and battery swapping service providers. The policy provides capital subsidy to service providers developing charging and battery swapping facilities across the State upto maximum Rs 10 lakh per charging station subject to maximum 2,000 such charging stations, and upto maximum Rs 5 lakh per swapping station subject to maximum 1,000 such swapping stations.

The State government shall also facilitate land to service providers for setting up public charging infrastructure by providing government land on lease for 10 years at a nominal revenue sharing model of Re 1 / kW.