Andhra Pradesh EV Subsidy

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Andhra Pradesh, a progressive state in India, is making significant strides in promoting electric vehicles (EVs) as part of its broader agenda to combat climate change, reduce pollution, and promote sustainable development. The state government has introduced several subsidies and incentives to encourage the adoption of electric vehicles among residents and businesses.

Andhra Pradesh EV Subsidy

The Need for EV Subsidies

Electric vehicles are crucial in the fight against climate change due to their lower greenhouse gas emissions compared to conventional internal combustion engine vehicles. Additionally, EVs help reduce urban air pollution, which is a significant health concern in many Indian cities. However, the high upfront cost of EVs and the underdeveloped charging infrastructure pose substantial barriers to their widespread adoption. Subsidies and incentives play a pivotal role in mitigating these challenges and accelerating the transition to electric mobility.

Andhra Pradesh EV Policy 2018-2023

The Andhra Pradesh government unveiled its EV policy for the period 2018-2023 with ambitious goals and a comprehensive framework to support the EV ecosystem. The policy aims to attract investments, promote manufacturing, and enhance the adoption of electric vehicles in the state.

Key Objectives

  1. Achieving Electrification Targets: The policy aims to achieve 10 lakh (1 million) electric vehicles on the road by 2024.
  2. Developing Charging Infrastructure: Establish a robust network of charging stations to alleviate range anxiety and support seamless EV operation.
  3. Promoting Manufacturing: Attract investments in EV manufacturing and related components, positioning Andhra Pradesh as a hub for the EV industry.
  4. Creating Jobs: Generate employment opportunities through the establishment of EV manufacturing units and ancillary industries.

Financial Incentives and Subsidies

The state government has outlined a variety of financial incentives and subsidies to make EVs more affordable for consumers and to support businesses involved in the EV ecosystem.

For Consumers

  1. Purchase Incentives: Direct subsidies on the purchase price of electric vehicles. For instance, buyers of electric two-wheelers, three-wheelers, and cars receive a subsidy that significantly reduces the cost disparity with traditional vehicles.
  2. Registration and Road Tax Exemptions: Full exemption from road tax and registration fees for all electric vehicles purchased within the state.
  3. Interest Subvention: Interest-free or low-interest loans are provided to consumers for purchasing electric vehicles, reducing the financial burden of the initial investment.

For Businesses

  1. Capital Subsidies: Financial assistance for setting up EV manufacturing plants and related infrastructure, including battery manufacturing and recycling units.
  2. Tax Incentives: GST rebates and other tax benefits for manufacturers and suppliers of EVs and their components.
  3. Land Allotment: Priority allotment of land at concessional rates for setting up EV-related industries.
  4. Infrastructure Development: Subsidies for installing charging stations and other necessary infrastructure to create a supportive ecosystem for EVs.

Non-Financial Incentives

In addition to financial subsidies, the Andhra Pradesh government provides several non-financial incentives to promote EV adoption:

  1. Parking Benefits: Designated parking spaces in urban areas for electric vehicles.
  2. Green License Plates: Issuance of green license plates for easy identification and special privileges such as access to carpool lanes and reduced toll fees.
  3. Public Awareness Campaigns: Initiatives to educate the public about the benefits of EVs and encourage their adoption.

Infrastructure Development

The success of the EV policy hinges significantly on the development of a robust charging infrastructure. The state government is working in collaboration with private players to set up a widespread network of charging stations across urban centers, highways, and rural areas. This includes:

  1. Public Charging Stations: Establishing fast-charging and regular charging stations at key locations.
  2. Home and Workplace Charging: Encouraging and subsidizing the installation of home and workplace charging points.
  3. Battery Swapping Stations: Promoting battery swapping technology to reduce downtime and enhance the convenience of using electric vehicles.

Challenges and Future Prospects

Despite the promising framework and incentives, there are challenges that need to be addressed for the successful implementation of the EV policy:

  1. High Initial Costs: While subsidies reduce costs, EVs are still relatively expensive compared to traditional vehicles.
  2. Battery Technology: Advancements in battery technology and cost reduction are crucial for making EVs more viable.
  3. Infrastructure Readiness: Rapid development of charging infrastructure is essential to support the growing number of EVs.

The Andhra Pradesh government is continually monitoring the policy’s progress and is prepared to make necessary adjustments to ensure its objectives are met. With sustained efforts, Andhra Pradesh aims to be a leader in the electric mobility revolution in India, setting an example for other states to follow.

Manufacturing subsidy and Tariff

Subsidies for Fixed Capital Investment (FCI)

Micro Industries:

  • 25% of FCI up to a maximum of INR 15 lakhs.

Small Industries:

  • 20% of FCI up to a maximum of INR 40 lakhs.

Medium Industries:

  • 20% of FCI up to a maximum of INR 50 lakhs.

Large Industries:

  • 10% of FCI up to a maximum of INR 10 crores for the first two units.

Mega Industries:

  • 10% of FCI up to a maximum of INR 20 crores for the first two units.

Subsidies for Clean Production Measures

Micro, Small, and Medium Enterprises (MSMEs):

  • 35% subsidy on the cost of plant and machinery, up to a maximum of INR 35 lakhs.

Large Projects:

  • 10% subsidy on the cost of plant and machinery, up to a maximum of INR 35 lakhs.

Subsidies for Sustainable Green Measures

MSMEs and Large Projects:

  • 25% subsidy on sustainable green measures, excluding the cost of land, land development, preliminary and pre-operative expenses, and consultancy fees, with a ceiling of INR 50 crores.

Stamp Duty and Transfer Duty Reimbursement

  • 100% reimbursement of stamp duty and transfer duty paid, applicable only once on the land.

The EV subsidies and incentives provided by the Andhra Pradesh government represent a significant step towards a sustainable and environmentally friendly future. By reducing financial barriers and fostering a supportive ecosystem for electric vehicles, the state is paving the way for a cleaner, greener, and more sustainable mode of transportation. The success of these initiatives could serve as a model for other regions aiming to achieve similar goals.

Electric Vehicles (EVs), powered by high-density batteries or fuel cells, are becoming more economical due to the declining prices of lithium-ion batteries, advances in fuel cell research, and more affordable renewable energy sources.

In this context, the Government of Andhra Pradesh has set ambitious targets: to be among the top three states in India by 2022, the best state by 2029, and a leading global investment destination by 2050. The government has identified the Electric Mobility sector as a key growth driver for the future. It aims to lead in developing sustainable transportation infrastructure by promoting an Electric Mobility Ecosystem in Andhra Pradesh.

To establish Andhra Pradesh as a major hub for electric mobility, the government introduces the “Electric Mobility Policy 2018-23.” This policy, developed after extensive consultations with stakeholders, industrial associations, and experts, aims to support all aspects of electric mobility and accelerate the adoption of Electric Vehicles, contributing to a healthier climate. The detailed policy document is available in Annexure-I.

Under the Electric Mobility Policy, the government has approved various benefits in the following areas to ensure the viability of projects: (1) Manufacturing, (2) Charging Infrastructure, (3) Demand Creation, and (4) Research and Development.

Financial Support to Manufacturing Firms

Large Project:

  • Defined as a project with a capital investment exceeding the threshold of a medium industry and up to INR 200 crores, or creating employment for over 1,000 people.

Mega Project:

  • Defined as a project with a capital investment of more than INR 200 crores, or creating employment for over 2,000 people.

Mega Integrated Automobile Project:

  • Refers to automobile projects that include EV powertrain assembly, press shop, body shop, EV battery assembly or fuel cell assembly, assembly line, paint shop, etc., either independently or through a consortium or joint venture, at the same location. These projects must involve investments exceeding INR 1,000 crores and must bring in ancillary units with a minimum investment of INR 200 crores within 3 years.

Ultra-Mega Battery Plant (UMBP):

  • A plant set up for manufacturing lithium-ion or other advanced batteries with an annual output of 1 GWh or more, with a minimum investment of INR 1,000 crores.

Financial Incentives under the Electric Mobility Policy

  1. Micro Industries:
  • 25% of Fixed Capital Investment (FCI), up to a maximum of INR 15 lakhs.
  1. Small Industries:
  • 20% of Fixed Capital Investment (FCI), up to a maximum of INR 40 lakhs.
  1. Medium Industries:
  • 20% of Fixed Capital Investment (FCI), up to a maximum of INR 50 lakhs.
  1. Large Industries:
  • 10% of Fixed Capital Investment (FCI), up to a maximum of INR 10 crores, for the first two units in each segment of Electric Vehicles (2-wheelers, 3-wheelers, 4-wheelers, buses), battery and charging equipment, hydrogen storage, and fueling equipment manufacturing.
  1. Mega Industries:
  • 10% of Fixed Capital Investment (FCI), up to a maximum of INR 20 crores, for the first two units in each segment of Electric Vehicles (2-wheelers, 3-wheelers, 4-wheelers, buses), battery and charging equipment, hydrogen storage, and fueling equipment manufacturing.
  1. Clean Production Measures:
  • For Micro, Small, and Medium Enterprises (MSMEs): 35% subsidy on the cost of plant and machinery, up to a maximum of INR 35 lakhs, as certified by the Andhra Pradesh Pollution Control Board (APPCB).
  • For Large Projects: 10% subsidy on the cost of plant and machinery, up to a maximum of INR 35 lakhs.
  1. Sustainable Green Measures:
  • 25% subsidy on total Fixed Capital Investment (FCI) for MSMEs and Large projects (excluding the cost of land, land development, preliminary and pre-operative expenses, and consultancy fees), with a ceiling of INR 50 crores.
  1. Special Incentives:
  • Tailored incentives for Mega, Mega Integrated Automobile Projects, and Ultra-Mega Battery Manufacturing Plants, provided on a case-by-case basis.

Stamp Duty Reimbursement

  1. Industrial Land Purchase or Lease:
  • 100% reimbursement of stamp duty and transfer duty paid by the industry on the purchase or lease of land for industrial use.
  1. Leases, Mortgages, and Hypothecations:
  • 100% reimbursement of stamp duty for the lease of land/shed/buildings, mortgages, and hypothecations.

External Infrastructure Subsidy

  • The government will provide external infrastructure such as power supply, water supply, and roads to the doorstep of the industrial unit, including charging and battery swapping stations, at 50% of the infrastructure cost, with a maximum limit of INR 2 crores per project.

Land

  • For Mega Integrated Projects, the government will offer land to dependent ancillary units at the same rates as those offered to the respective Original Equipment Manufacturer (OEM) (when the government allocates land to the OEM), up to a maximum of 50% of the land allocated to the OEM.

Power

  • The Government of Andhra Pradesh will provide a fixed power cost reimbursement of Rs. 1.00 per unit for a period of five (5) years from the date of commencement of commercial production.

Additional Financial Incentives under the Electric Mobility Policy

Power

  1. Electricity Duty:
  • The electricity duty will be reimbursed for a period of five (5) years.
  1. Dedicated Power Line:
  • A dedicated line along with a special discount for night-time/non-peak time usage will be offered for testing BEV batteries based on requirements.

Water

  1. Water Supply Cost:
  • Water supply will be provided at 50% of the existing industrial supply tariff price for the initial three (3) years from the date of commencement of commercial production.
  1. Water Supply and Treatment:
  • The Government of Andhra Pradesh will provide water supply and facilitate/support the setup of water treatment plants in/around major auto hubs as needed.
  1. Water Treatment Plant Subsidy:
  • The government will reimburse 25% of the cost of a water treatment plant, up to a limit of INR 2 crores.

Tax Incentives

  • 100% net SGST accrued to the State will be reimbursed for a period of five (5) years for micro and small industries, seven (7) years for medium industries, and ten (10) years for large industries. This reimbursement will be limited to 100% of capex or for the stated period, whichever is earlier.

Skill Development Incentives

  • A stipend of INR 10,000 per employee per year will be provided for the first 50 employees of a single company for Micro, Small, Medium, and Large firms.

Marketing Incentives

  • 50% of the cost of participation, up to a maximum of INR 5 lakhs, will be reimbursed to a maximum of 10 MSME units per year for participating in international trade fairs.

Industrial Parks & Clusters

  1. EV Parks:
  • The Government of Andhra Pradesh will allocate 500 to 1,000 acres of land for developing EV Parks with plug-and-play internal infrastructure, common facilities, and necessary external infrastructure.
  1. Auto Clusters and Automotive Suppliers Manufacturing Centers (ASMC):
  • Developers of Auto Clusters and ASMCs specific to Electric Vehicles will be provided financial assistance of 50% of fixed capital investments in building and common infrastructure, up to a maximum of INR 20 crores.

Recycling

  • Battery recycling plants will be incentivized to extract compounds from used batteries.

Financial Incentives for Private Charging Stations & Hydrogen Generation & Refueling Infrastructure

  1. Direct-Current (DC) Chargers (100V and above):
  • A capital subsidy of 25% of the value of the charging station equipment/machinery will be provided for the first 100 stations, up to a maximum subsidy of INR 10,00,000 per station.

Financial Incentives for Private Charging Stations & Hydrogen Generation & Refueling Infrastructure

  1. Direct-Current (DC) Chargers (Below 100V):
  • A capital subsidy of 25% of the value of the charging station equipment/machinery will be provided for the first 300 charging stations, up to a maximum subsidy of INR 30,000 per station.
  1. Swapping Stations:
  • A capital subsidy of 25% of Fixed Capital Investment (excluding the cost of battery inventory) will be provided, up to a maximum subsidy of INR 10 lakhs for the first 50 stations.
  1. State Goods and Services Tax (SGST) Reimbursement:
  • 100% net SGST accrued to the State will be reimbursed for the purchase of fast chargers (DC chargers of capacity 100V and above), as well as for the purchase of advanced batteries for Battery Electric Vehicles (BEV) swapping.
  1. Hydrogen Generation and Fueling Plants:
  • A capital subsidy of 25% of the Fixed Capital Investment (FCI) will be provided for hydrogen generation and fueling plants, with a maximum subsidy of INR 10 Crore per unit for the first 10 units.

Financial Incentives for Private Purchase and Use towards Demand Creation

  1. Registration Charges and Road Tax Reimbursement:
  • Reimbursement of registration charges and road tax on the sale of Electric Vehicles will be provided until 2024.
  1. SGST Reimbursement for Services:
  • Reimbursement of the net SGST accrued to the State will be provided for firms involved in services such as leasing fleets of Electric Vehicles, owning or operating EV fleets, and providing charging/battery swapping/Hydrogen Stations for recharging/refueling Electric Vehicles, until 2024.

R&D Grants

  • A research grant of INR 500 Crore will fund the most innovative solutions in the mobility space. This fund will support the Center for Advanced Automotive Research (research labs working on battery, EV, EV component research, etc.), the Center for Advancement of Smart Mobility (incubators, startups, prototyping centers, etc.), research scholars, and testing and quality labs as needed.


Other Initiatives by the Government

Government Targets

  1. Conversion of APSRTC Bus Fleet:
  • The government aims to convert 100% of the APSRTC bus fleet, consisting of over 11,000 buses, into electric buses (Battery Electric Vehicles or Fuel Cell Electric Vehicles) by 2029. The first phase will involve the complete conversion of the bus fleet in the top 4 cities by 2024.
  1. Phase Out of Fossil Fuel-Based Commercial Fleets:
  • The government plans to phase out all fossil fuel-based commercial fleets and logistics vehicles in the top 4 cities by 2024 and extend this phase-out to all cities by 2030.
  1. Conversion of Government Vehicles:
  • All forms of government vehicles, including those under Government Corporations, Boards, and Government Ambulances, will be converted to electric vehicles by 2024.

Government Department Investments

  1. State Power Distribution Companies (DISCOMs):
  • DISCOMs will invest in setting up both slow and fast charging networks in government buildings and other public places. These charging points will be accessible to both government and private vehicles.
  1. Charging Infrastructure Setup:
  • DISCOMs will establish the charging infrastructure either independently or through third-party operators using appropriate Public-Private Partnership models. The costs incurred can be recovered as part of the Aggregate Revenue Requirement (ARR).

Initiatives Facilitating Private Infrastructure Investments

  1. Charging Infrastructure at APSRTC Depots and Public Spaces:
  • Andhra Pradesh State Road Transport Corporation (APSRTC) depots, bus terminals, and bus stops will be equipped with charging stations. Public parking spaces will also be mandated to have charging stations.
  1. Government Building Charging Stations:
  • Government buildings will establish a roadmap to install charging or swapping stations in all parking spaces.
  1. Highway Charging Infrastructure:
  • Charging infrastructure will be installed at least every 50 km on highways and other major roads.

City & Building Codes

  1. City Code Modifications:
  • City codes will be adjusted for both public places and private buildings to accommodate the necessary infrastructural changes for charging and battery swapping stations.
  1. Urban Local Bodies Regulations:
  • Urban Local Bodies and municipality rules/regulations will be modified to allow the setup of charging and battery swapping stations within their limits as required.

Energy Sale

  1. EV Tariff Category:
  • A separate tariff category for Electric Vehicles (EVs) will be established.
  1. Time-of-Day Power Sale:
  • Time-of-day sale of power to Battery Electric Vehicles will be implemented to offer cheaper power during non-peak hours.
  1. Regulatory Framework for V2G Sale:
  • The Andhra Pradesh Electricity Regulatory Commission (APERC) will issue regulations for vehicle-to-grid (V2G) sale of power, including from battery swapping stations.
  1. Third-Party Charging Infrastructure Providers:
  • Third-party EV charging infrastructure providers will be permitted to procure power from DISCOM at regulated tariffs and provide charging services to Electric Vehicles.
  1. Open Access for Renewable Energy Sources:
  • Third-party EV charging service providers can procure power through the open access route from renewable energy sources, regardless of demand size, with appropriate regulations and charges determined by APERC.
  1. Renewable Energy Generation:
  • Third-party EV charging service providers can establish their own renewable energy generating stations on their premises solely for charging Electric Vehicles.

Revision of Transport Regulations for Electric Vehicles

  1. Encouragement of Cloud Charging Features:
  • Cloud charging features will be promoted to facilitate digital metering and transactions using payment apps, Near Field Communication (NFC) enabled devices, Radio Frequency Identification (RFID) tags, etc., ensuring flexibility and customer friendliness.

Demand Creation

  1. Model Electric Mobility Cities:
  • Vijayawada, Vishakhapatnam, Amaravati, and Tirupati will be designated as Model Electric Mobility (EM) cities with phased goals for Electric Vehicles adoption, charging & hydrogen refueling infrastructure, and new EV-enabling building codes.
  1. Conversion of Commercial & Logistics Fleets:
  • Model EM cities will aim to convert 100% of all commercial & logistics fleets to electric by 2024, including those belonging to Government Organizations, APSRTC, Educational Institutes, Hospitals, Corporates, and other institutions.
  1. DC Public Charging Stations:
  • DISCOM will plan to install 100 DC public charging stations in each of these cities.
  1. Smart City Proposals:
  • Smart city proposals to the Central Government will include support for charging infrastructure and hydrogen fueling stations. Designated areas will be marked as “Green Zones” accessible only to non-fossil fuel-based vehicles.
  1. Infrastructure Density Goals:
  • These cities will establish specific goals for charging and hydrogen refueling infrastructure density within a defined timeline linked to the deployment targets for Electric Vehicles.
  1. Incentives for Environmentally Friendly Vehicles:
  • Higher registration, renewal, parking fees, congestion charges, taxes/cess on sale, and limitations on entry into city limits will be imposed on highly polluting vehicles to encourage the switch to environmentally friendly vehicles.

Revision of Transport Regulations for Electric Vehicles

  1. Priority Permits for Electric Autos:
  • Electric Autos will be prioritized for permits.
  1. Regulation of Low-Power Electric Rickshaws:
  • Low-power Electric rickshaws will be restricted to certain areas or outside major cities to mitigate congestion.
  1. Corporate Ownership of Electric 3-Wheelers:
  • Corporates will be permitted to own and operate electric 3-wheelers.
  1. Registration of Retrofitted Electric Vehicles:
  • Registration will be allowed for 2-wheelers, 3-wheelers, and 4-wheelers retrofitted with an electric motor and powertrain using advanced battery technologies, certified by Automotive Research Association of India (ARAI) or other Government recognized agencies.
  1. Mandate for Electric Vehicles in Cities:
  • Electric Vehicles will be mandated in cities while simultaneously phasing out polluting vehicles.
  1. Phase-out of Fossil Fuel-based Vehicles:
  • Model EM cities will devise timelines for phasing out all fossil fuel-based 3 and 4-wheelers in corporate, medical, educational, and logistics fleets by 2024, with eventual implementation statewide by 2030.

Smart Mobility Corporation

  • A corporation will be established to coordinate all necessary activities for promoting the futuristic transportation needs.

The policy will be effective from the date of its issuance and will remain in force for a period of five (5) years or until June 7, 2023. The Department of Energy, Department of Transport, Roads and Buildings (TR&B), Department of Municipal Administration and Urban Development, and other relevant departments and Government Corporations will issue necessary amendments or orders as required. The incentives outlined in the Policy will be extended to industries according to guidelines to be separately notified by the Commissioner of Industries.

This order has been issued with the concurrence of the Finance (FMU-REV-I&C) Department, vide their U.O. No. 45027/498/FMU-REV-I&C) Department, dated January 29, 2018.

(BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH)