Andhra Pradesh EV Policy Boosts Private Investment In EV Manufacturing

Andhra Pradesh Unveil Its Electric Mobility Policy 4.0 Till 2029

To transform Andhra Pradesh into an electric vehicle (EV) manufacturing hub, the state recently announced its Andhra Pradesh Sustainable Electric Mobility Policy (2024-29). This policy will be in effect for the next five years, promoting quality infrastructure through private investments, fostering urban mobility growth, and reducing transport-sector emissions to achieve carbon neutrality by 2047.

The policy framework of AP SMEP 4.0 aims to establish manufacturing units for electric vehicles, EV components, and Electric Vehicle Supply Equipment (EVSE). It also supports operators of public and private charging or swapping station infrastructure. Additionally, the policy targets customers purchasing or registering EVs in Andhra Pradesh. It also includes public transport operators, mobility service providers, operators of registered vehicle scrap facilities (RVSF), e-waste recycling units, automated testing centers (ATS), private park developers, innovators, R&D centers, and testing agencies.

Extending Support to Manufacturers

The policy provides the following financial incentives for MSME manufacturers:

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1. Investment Subsidies:
   • 35% of eligible fixed capital investment, up to a maximum of INR 7 crore.
   • 5% of annual turnover for three years from the date of production commencement, capped at INR 10 crore.
2. Power Tariff:
   • Reimbursement of power costs at INR 1 per unit, with an annual cap of INR 15 lakh per enterprise for six years.
3. Net SGST:
   • 100% reimbursement of net SGST to the state, provided the incentive amount does not exceed 100% of eligible fixed capital investment (eFCI).
4. Electricity Duty:
   • Reimbursement of 50% of electricity duty costs for six years. This incentive is specifically for battery manufacturers producing for EV end-use.
5. Quality Certification Subsidy:
   • Reimbursement of 50% of the cost incurred for testing or certification to meet regulatory quality standards, up to INR 2 lakh.
6. Patent Cost Subsidy:
   • Reimbursement of costs incurred for patent filing or intellectual property protection, up to INR 2 lakh.
7. Stamp Duty:
   • Reimbursement of 100% stamp duty and registration charges for land purchases for industrial use. This is a one-time reimbursement and does not apply to subsequent transactions on the same land.
8. Land Conversion Fee:
   • Reimbursement of 100% land conversion fees paid.
9. Training Subsidy:
   • Reimbursement of 100% of employer contributions to EPF, capped at INR 1 lakh per enterprise annually, for three years from the date of production commencement.

Targets for 2029

India’s electric vehicle (EV) adoption is accelerating, with EVs comprising 6.5% of total vehicle sales in 2023. The EV segment witnessed a growth rate of 116% in 2023, particularly in the E3W cargo and passenger segments. Leading states for EV adoption include Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu, and Rajasthan. Projections suggest EV penetration could exceed 40% by 2030. The Indian EV market is expected to grow significantly, from USD 3.21 billion in 2022 to USD 113.99 billion by 2029.

By 2029, the Andhra Pradesh Sustainable Electric Mobility Policy targets include:

• Registration of at least 2 lakh new e2-wheelers.
• Registration of at least 10,000 new 3-wheelers.
• Registration of at least 20,000 new 4-wheeler BEVs.
• 100% electrification of the APSRTC fleet.
• Establishing one charging station every 30 km along notified green channels.
• Establishing one charging station per 3×3 km grid in e-mobility cities.
• Utilizing a corpus fund of INR 500 crore to build e-mobility cities.
• Setting up 100 incubation centers focused on e-mobility startups.

These targets will measure the effectiveness of the policy measures and ensure substantial progress in EV adoption and infrastructure development.

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