Odisha Electric Vehicle Policy, 2021 Targets EV Manufacturing

Posted by Written by Naina Bhardwaj Reading Time: 3 minutes

The Odisha (previously, Orissa) government approved the Odisha Electric Vehicle Policy, 2021 on August 27, 2021. The policy is mainly aimed at accelerating the adoption of electric vehicles (EVs) along with the focus on EV and component manufacturing, including batteries. The policy is set for a period of five years and seeks to achieve 20 percent EV adoption across all vehicle registrations by 2025.

Odisha’s EV policy incentivizes the transition to electric mobility by offering fiscal sops for EV manufacturing, purchase, and scrapping. Additionally, interest subvention in loans and waivers in road tax and registration fee will also be provided to facilitate faster EV adoption. Incentives have been proposed for start-ups as well.

The policy will be implemented by the Odisha transport department, where a dedicated EV-Cell will be instituted to monitor the day-to-day implementation.

Purchase incentives under Odisha electric vehicle policy, 2021

Odisha’s EV policy focuses on incentivizing the purchase and use of EVs in the following segments:

  • Two-wheeler (2W) EVs: Subsidy is available at 15 percent, subject to a cap of INR 5000.
  • Three-wheeler (3W) EVs: Subsidy is available at 15 percent, subject to a cap of INR 12,000.
  • Four-wheeler (4W) EVs: Subsidy is available at 15 percent, subject to a cap of INR 100,000.
  • Electric buses (e-buses): Subsidy is available at 10 percent, subject to a cap of INR 2,000,000.

Additionally, the following incentives have been notified:

  • Availability of open permit for electric autos (three-wheeler EVs).
  • 100 percent interest free loans will be provided to State Government employees for purchase of EVs.
  • Reimbursement of 100 percent state goods and services tax (SGST) on the sale of electric buses sold and registered in Odisha state during the policy period. Furthermore, the policy provides for 100 percent exemption on road tax and registration fees of the e-buses for the first four years.
  • Interest subvention of five percent on loans for purchase of e-buses will be available.

However, to avail above incentives, the two-wheeler EVs will have to qualify on the basis of performance and quality check criteria, as specified under Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme, Phase II. These criteria include:

  1. Minimum top speed: 40km/h
  2. Minimum acceleration: 0.65m/s2
  3. Maximum electric energy consumption: Not exceeding 7kWh/100km
  4. Warranty: At least three years comprehensive warranty including battery warranty from the manufacturer.

Purchase incentives for goods carriages

The Odisha electric vehicle policy also provides purchase incentive of INR 30,000 to the first 5000 electric goods carriers to be registered in the state. Additionally, interest subvention of five percent on loans for purchase of electric goods carriers will also be provided during the policy period.

The state policy also provides for 100 percent waiver on the road tax and registration charges as well as 100 percent reimbursement of SGST on sale of electric goods carriages during the policy period.

Manufacturing incentives under Odisha EV policy, 2021

The small and micro EV battery manufacturing units will be facilitated with the following incentives under Micro, Small and Medium Enterprises (MSME) Policy, 2016:

  • New micro and small enterprise: Assistance to the tune of 25 percent of capital investment made in plant and machinery, subject to an upper limit of INR 10 million will be available.
  • New micro and small enterprise owned by SC/ST/differently abled/women/ technical entrepreneur: Financial assistance amounting to 30 percent of capital Investment made in plant and machinery subject to an upper limit of INR 12.5 million will be available.
  • New micro and small enterprise set up in industrially backward districts, including KBK districts: Additional capital investment subsidy at five percent of investment made in plant and machinery, over and above the subsidy available in the above two situations.

Further, the policy aims to make transition to Lithium Ion (Li-ion) batteries in the long-term and the Odisha state government has offered capital subsidy, tax, and tariff incentives to attract private investment in the sector and explore partnership opportunities to start Li-ion battery manufacturing in the state.

Charging incentives under Odisha electric vehicle policy, 2021

Public charging infrastructure

The Odisha state government shall provide capital subsidy of 25 percent to the selected energy operators towards installation expenses of these EV chargers. It must be noted that such subsidy will be available within one year of allocation of the location of the charging station. Further, a special subsidy shall be allowed for the first 500 charging stations. The policy also proposes that the state government will reimburse 100 percent SGST to the energy operators for purchase of batteries to be used in swapping stations.

Private charging infrastructure

Odisha’s EV policy provides purchase grant of up to INR 5000 towards charging equipment, for the installation of first 20,000 private charging points.

India Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Delhi and Mumbai. Readers may write to india@dezshira.com for more support on doing business in in India.

We also maintain offices or have alliance partners assisting foreign investors in Indonesia, Singapore, Vietnam, Philippines, Malaysia, Thailand, Italy, Germany, and the United States, in addition to practices in Bangladesh and Russia.