UP Govt Announces Range of Incentives for EVs and Batteries Manufacturing

Uttar Pradesh doesn’t just want to be a consumption state anymore, but a producer also, especially when  it comes to industry.  The state government, in an announcement on a range of incentives to encourage EV and battery manufacturers to consider the state for plants, has announced that the  first two integrated EV and ultra-mega battery projects will receive a 30% base capital subsidy from Uttar Pradesh (incentives for EVs and batteries manufacturing), up to a maximum of Rs 1000 crores.

A manufacturing facility must have a minimum investment of Rs. 1500 crores and a production capacity of 1 GWh. The capital investment subsidy will be given over 20 years in equal yearly payments. The “Uttar Pradesh Electric Vehicle Manufacturing and Mobility Policy 2022″—recently published—announced the incentives. 

The “Uttar Pradesh Electric Vehicle Manufacturing and Mobility Policy 2022,” which was just launched, made the announcements regarding the incentives. The nodal organization would be Invest UP, the UP government’s investment promotion and facilitation organization.

Over ten years, subsidies will be handed out in equal yearly payments. Up to 18% of the funding, or up to Rs 90 crore, will go toward large EV and battery projects. Equal monthly payments for ten years will be made for the subsidies. The capital subsidy for Micro, Small, and Medium Enterprises (MSME) projects will be 10% of Eligible Capital Investment up to Rs 5 crore. Over two years, subsidies will be handed out in equal yearly payments. 

Five years will pass before the policy expires. Gross capacity utilization multiple (GCM) shall be taken into account as 1 for the first year if the unit’s capacity utilization is at least 40% of the installed capacity to guarantee that the beneficiaries make the best use of the installed capacity.

The stamp fee paid on the land purchased or leased to set up an integrated EV or ultra-mega battery project will be fully refunded once commercial production starts. The cost of quality certification for large and MSME EV and battery projects that achieve certification up to Rs 10 lakh per unit will be refunded in half. Up to Rs 200,000 in expenses incurred for big and MSME EV and battery projects obtaining worldwide patents would be reimbursed. The maximum amount that can be reimbursed for obtaining domestic patents is Rs 50,000. By 2030, the state’s government wants to convert all of its fleet of official cars to electric vehicles (EVs).

Purchasing Inducements

Electric two-wheelers (E2Ws) would have a 15% subsidy applied to the ex-factory price of up to Rs 5,000 per vehicle. The maximum budgetary allocation for E2Ws is Rs 100 crore, and the subsidy would be given to 200,000 E2Ws. A 15% discount on the ex-factory price of up to Rs 12,000 for every electric three-wheeler (E3W) will be given. The maximum budgetary expense for E3Ws is Rs. 60 crores, and the subsidy would be given to 50,000 E3Ws. Electric four-wheelers (E4Ws) would have a 15% subsidy applied to the ex-factory price of up to Rs 100,000 per vehicle. The maximum budgetary allocation for E4Ws is Rs 250 crore, and the subsidy would be given to 25,000 E4Ws. (incentives for EVs and batteries manufacturing)

For EVs purchased and registered in UP during the first three years of the policy period, registration costs and road tax will be exempt. The EVs must be produced, bought, and registered in the state to be eligible for registration fees and road tax exemption for the final two years of the policy period.

Infrastructure for Charging

On the eligible fixed capital investment, the first 2,000 charging stations will each receive a capital subsidy of 20%, up to Rs 500,000. A capital subsidy of 20%, or up to Rs 500,000 per station, will be given to the first 1,000 exchanging stations. To build charging stations, the land would be leased for ten years at Rs 1 per kWh under a revenue-sharing basis. Open access can be used to purchase charging and swapping stations with a cumulative contract demand of at least 1 MW. In towns and urban agglomerations, a 3 km by 3 km grid of charging and exchanging infrastructure will be constructed. Along expressways and highways, charging infrastructure would be encouraged at a 25 km distance.

In collaboration with the UP Pollution Control Board, the state government would encourage the establishment of collection sites for used batteries at EV dealerships and battery manufacturers for recycling at these facilities. At exchanging and charging stations, the government will also advertise the availability of battery dumping services. (incentives for EVs and batteries manufacturing)