Secure Your Car With The Super Car Insurance Plan!
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Secure Your Car With The Super Car Insurance Plan!
Believe it or Not! Save upto* 75% on TATA AIG Car Insurance
State-wise Electric Vehicles (EV) Subsidies
- Author :
- TATA AIG Team
- ●
- Last Updated On :
- 10/09/2024
Subsidies on electric vehicles (EVs) have been introduced in India to promote clean and green transportation. The Indian government has promoted EV use by offering manufacturers and buyers various subsidies, tax exemptions and incentives.
A government subsidy for electric vehicles has helped manufacturers set up EV manufacturing plants for research and development in the EV sector.
Additionally, the government has set up an investment promotion cell that supports the EV industry by addressing its concerns and providing necessary information. In this blog, we will learn more about EV subsidies.
What is the FAME Subsidy?
The Indian government has set up an electric vehicle scheme called Faster Adoption and Manufacturing of Electric Vehicles (FAME) to promote the use of EVs.
The EV subsidy scheme provides incentives for setting up charging infrastructure, providing financial support for R&D in the EV sector and promoting the adoption of EVs among government departments and public sector undertakings.
The FAME scheme in India has two phases: FAME 1 and FAME 2.
What is FAME 1 Subsidy on Electric Vehicles?
FAME I was launched on April 1, 2015, and aimed to support the adoption of electric and hybrid vehicles in India by providing subsidies on the purchase of such vehicles. This phase was extended until March 31, 2019.
The FAME scheme is based on the Demand Incentive Disbursement Mechanism, and the EV subsidy for every vehicle category (pure electric, hybrid, etc.) is decided based on the battery and technology specifications.
What is the FAME 2 Subsidy for Electric Vehicles?
On April 01, 2019, an expanded version of the original scheme called FAME 2 was launched. It focused on developing the electric vehicle ecosystem in India, including developing charging infrastructure, R&D and supporting the manufacturing of electronic components.
Under FAME 2, electric vehicle subsidies are provided in India for two-wheelers, three-wheelers and four-wheelers, as well as electric buses. The FAME 2 subsidy for electric vehicles is expected to cover 10 lakh electric two-wheelers, 7000 electric buses, 5 lakh electric three-wheelers and 55,000 electric four-wheelers.
Under this EV subsidy program, the incentive for two-wheeler EVs was first set up at ₹10,000 per kWh. However, it has now boosted by 50%, which is ₹15,000 per kWh.
Furthermore, the subsidy cap has been increased from 20% to 40% of the vehicle's cost. Under this, the electric car subsidy is ₹10,000 per kWh. However, the maximum incentive for an electric car is ₹1.5 lakhs.
Requirement for Fame 2 Subsidy List
Certain specific aspects of the subsidy program are included, such as the incentives being only available for SUVs and electric vehicles, with the ex-factory price being limited to ₹15 lakhs. This simply means that EV cars that cost more than ₹15 lakhs are not eligible for the incentives.
Furthermore, the Fame 2 EV subsidy is available for two-wheelers that cost less than ₹1.5 lakhs. The program requires a minimum range of 80 kilometres and a top speed of 40 kilometres per hour for battery-powered two-wheelers.
How to Avail of the FAME Subsidy in India?
Here is a step-by-step guide to availing of the FAME subsidy for electric vehicles:**
Eligible Electric Vehicle: The first step is to purchase an electric vehicle eligible for the FAME subsidy. Before purchasing, it is essential to check the list of eligible vehicles.
OEM Registration: To receive the subsidy, the Original Equipment Manufacturer (OEM) must register for the FAME scheme. Only registered OEMs are eligible to offer the subsidy.
Price Quotation: When purchasing an eco-friendly vehicle, the dealer will quote the price after deducting the subsidy amount. For example, if the price of an EV is ₹1 lakh and the subsidy amount is ₹30,000, the dealer may quote a cost of ₹70,000.
Purchase Details: The dealer will forward the purchase details to the OEM after completing the purchase.
Monitoring Body: The OEM will then forward the purchase details to the National Automotive Board (NAB), which monitors the FAME subsidy scheme.
Verification: After the NAB verifies the purchase details, the subsidy amount is credited to the OEM.
Subsidy Amount: The OEM will then credit the subsidy amount to the dealer, who will reduce the vehicle's cost by the subsidy amount. This cost reduction will be reflected in the customer's payment.
It is simple to get a subsidy for your electric vehicle if you follow the due process outlined above.
Government Subsidy on Electric Vehicles (Cars and SUVs)
Every state has its own criteria and policy for electric vehicles, so the state government's incentive for electric vehicles may vary. Below is the list of electric car subsidies in India:
| State | Subsidy (Per kWh) | Maximum Subsidy | Discount on road tax |
|---|---|---|---|
| Maharashtra | ₹5,000 | ₹2,50,000 | 1 |
| Assam | ₹10,000 | ₹1,50,000 | 1 |
| Gujarat | ₹10,000 | ₹1,50,000 | 0.5 |
| West Bengal | ₹10,000 | ₹1,50,000 | 1 |
| Meghalaya | ₹4,000 | ₹60,000 | 1 |
| Bihar | ₹10,000 | ₹1,50,000 | 1 |
| Rajasthan | Nil | Nil | NA |
| Odisha | NA | ₹1,00,000 | 1 |
| Madhya Pradesh | Nil | Nil | 0.99 |
| Punjab | Nil | Nil | 1 |
| Telangana | Nil | Nil | 1 |
| Kerala | Nil | Nil | 0.5 |
| Uttar Pradesh | Nil | Nil | 0.75 |
| Karnataka | Nil | Nil | 1 |
| Andhra Pradesh | Nil | Nil | 1 |
| Tamil Nadu | Nil | Nil | 1 |
Government Subsidy on Electric Vehicles (Scooters and Bikes)
Like subsidies on EV cars and SUVs, electric scooters and bikes are eligible for state government subsidies. Below are the government subsidies on electric two-wheelers.
| State | Subsidy (Per kWh) | Maximum Subsidy | Discount on road tax |
|---|---|---|---|
| Maharashtra | ₹5,000 | ₹25,000 | 1 |
| Assam | ₹10,000 | ₹20,000 | 1 |
| Gujarat | ₹10,000 | ₹20,000 | 0.5 |
| West Bengal | ₹10,000 | ₹20,000 | 1 |
| Meghalaya | ₹10,000 | ₹20,000 | 1 |
| Bihar | ₹10,000 | ₹20,000 | 1 |
| Rajasthan | ₹2,500 | ₹10,000 | NA |
| Odisha | NA | ₹5,000 | 1 |
| Madhya Pradesh | Nil | Nil | 0.99 |
| Punjab | Nil | Nil | 1 |
| Telangana | Nil | Nil | 1 |
| Kerala | Nil | Nil | 0.5 |
| Uttar Pradesh | Nil | Nil | 1 |
| Karnataka | Nil | Nil | 1 |
| Andhra Pradesh | Nil | Nil | 1 |
| Tamil Nadu | Nil | Nil | 1 |
Government Subsidy on Electric Vehicles (Commercial Vehicles)
The government also offers subsidies on e-rickshaws and e-buses to encourage the manufacturing and sales of commercial electric vehicles. The exact amount of subsidy for commercial vehicles depends on the battery capacity, technology and cost of the vehicle.
Under this scheme, the government offers an incentive of ₹20,000 per kWh to state transport units. However, this subsidy on commercial vehicles may be subject to bidding by OEMs.
Furthermore, hybrid commercial vehicles under ₹15 lakh rupees and electric buses under ₹2 crores are eligible for subsidies and incentives. Additionally, e-rickshaws or electric three-wheeler vehicles under ₹5 lakh are eligible for subsidies and incentives.
Top EV-Friendly States that Offer Best Incentives to Buyers
As mentioned, state government subsidies on electric vehicles may vary depending on the EV policy. However, below is the list of states that offer the best subsidies on EV cars, bikes and three-wheelers.
Gujarat
The very first on our list is Gujarat, which offers a maximum subsidy of up to ₹20,000 on electric two-wheelers with no registration charges. Furthermore, the subsidy is up to ₹50,000 for three-wheelers. For electric four-wheelers, the state government offered a maximum benefit of up to ₹1.5 lakh.
Maharashtra
Maharashtra EV subsidy includes up to ₹25,000 for electric two-wheelers, up to ₹30,000 for electric three-wheelers with no registration charges and road taxes, and up to ₹2.5 lakh for electric four-wheelers.
Meghalaya
Meghalaya state government offers a subsidy of up to ₹20,000 for electric two-wheelers and ₹60,000 for electric four-wheelers with no registration charge and road taxes.
Karnataka
The Karnataka state government does not offer any direct incentive to electric vehicle buyers, but it does offer concessions and subsidies to EV makers, such as charging enterprises, battery makers and components.
Andhra Pradesh
Similar to Karnataka, the Andhra Pradesh state government also does not offer any direct incentive to EV buyers, but it exempts the road tax and registration charges for all eco-friendly vehicles registered in the state.
Telangana
The Telangana government offers a total exemption from registration charges and road tax to all EV buyers in the state.
Tamil Nadu
Like Telangana, the Tamil Nadu government waives registration charges for EVs in the state and offers a 100% road tax waiver.
Kerala
The Kerala government offers electric vehicle buyers a 50% exemption on road tax for the first five years and a subsidy ranging from ₹10,000 to ₹30,000 for e-auto rickshaws.
Can Electric Vehicles be Secured with Insurance?
Like their counterparts, electric vehicles can and should be protected with insurance coverage. Hence, a car insurance policy is essential if you have an electric car. In fact, the insurance for your four-wheeler EV can be customised with TATA AIG.
You can choose the appropriate coverage for your vehicle by using the TATA AIG car insurance calculator, which is also useful for calculating reasonable car insurance premiums.
As a result, you can protect your EV against financial losses in case of accidents, theft or other damages.
While there are various types of EV car insurance coverage policies that you can choose from, comprehensive insurance for your 4-wheeler can save you from several financial losses and damages to your car, along with third-party liability protection and more.
Further, you can enhance EV protection with various add-ons like a return-to-invoice cover, roadside assistance, and more.
With a hassle-free buying and renewing process, you can buy four-wheeler insurance from our website in just a couple of minutes without any paperwork.
Moreover, remember to renew your car insurance policy on time so your electric car can always enjoy uninterrupted coverage from uncertain risks and damages. To check the car insurance renewal price, explore the TATA AIG website.
Conclusion
A range of measures taken by the Indian government aim to reduce the upfront cost of EVs and make them more affordable for the general public.
Do note that the subsidy amount and the list of eligible vehicles under the government subsidy vehicle scheme may change based on government policies and regulations.
This is why you should check with the dealer and the OEM for the most up-to-date information on the subsidy before purchasing.
FAQS
Which state has the highest EV subsidy in India?
Gujarat offers the highest subsidy on EV vehicles in India.
Will I get a subsidy on an EV car?
Yes, you may be eligible for a subsidy on an electric vehicle car, depending on the policies and incentives offered by the state government.
Are e-rickshaws eligible to receive EV subsidies?
Yes, e-rickshaws are eligible to receive EV (electric vehicle) subsidies in India if the car is under ₹5 lakh.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.
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