The Telangana government recently introduced the 'Telangana Electric Vehicle & Energy Storage Policy 2020-2030', which includes significant benefits for electric vehicle (EV) owners.
Effective from this week, the state government is offering a 100% exemption from road tax and registration fees on EVs for two years, until December 31, 2026. The previous restriction on tax exemptions for the first 5000 EVs has been removed, allowing an unlimited number of EVs to be registered with tax exemptions under the new policy.
These tax exemptions are applicable to various types of vehicles including two-wheelers, four-wheelers, commercial passenger vehicles such as taxis and tourist cabs, three-seater auto-rickshaws, electric tractors, and electric buses. Under the new policy, two-wheelers can save up to Rs 15,000 and four-wheelers can save up to Rs 3 lakh in taxes and fees.
Additionally, electric buses operated by the Telangana State Road Transport Corporation will continue to be exempt from certain fees indefinitely. Besides, buses owned by industries solely for employee transportation purposes will be exempt from registration fees and road tax in Telangana until December 31, 2026, regardless of the number of vehicles registered.
Road tax and ex showroom price
Telangana currently has 1.7 lakh electric vehicles registered, making up around 5% of all vehicles in the state. The Electric Vehicle and Energy Storage Policy for 2020-2030 was initially introduced during the previous administration led by the KCR government. This policy provided incentives, such as exemptions on road tax, registration fees, and retrofitting costs for the purchase of electric vehicles, albeit in a limited capacity.
Under the new policy, all electric vehicles registered with the Telangana state transport department will now be exempt from road tax and registration fees. This will lead to a significant reduction in the overall price of an electric vehicle. Essentially, prospective electric vehicle buyers will only need to pay for insurance, roadside assistance, and any optional accessories on top of the ex-showroom price.
The revised EV policy now includes commercial vehicles like taxis, three-wheelers, light goods carriers, tractors, and buses in addition to two-wheelers and passenger vehicles. The Telangana State Road Transport Corporation (TSRTC) and private companies running electric buses will receive substantial benefits. State-owned and private fleet electric vehicles will be completely exempt from road tax and registration fees for their entire operational lifespan.
"The Government of Telangana's decision to exempt road taxes and registration fees for electric vehicles is a commendable step towards boosting EV adoption. This move not only promotes cleaner air for Telangana's residents but also positions the state as an attractive destination for investment, emphasizing a commitment to a healthier environment. The Telangana Government's exemption of road taxes and registration fees for electric vehicles is expected to revitalize the EV market, especially after a recent decline post the 2020-30 EV Policy cap. This incentive not only makes EVs significantly more affordable—saving 12% for two-wheeler buyers, 14-17% for car buyers, and 15-20% for buses and institutional vehicles—but also encourages more EV manufacturers to establish operations in Telangana. Additionally, Hyderabad, a growing startup hub, stands to benefit as this move supports new ventures in the EV space, aligning well with the state’s investment-friendly stance," said Mallikarjun Bhogavalli, RSM India.
PM E-Drive Scheme
The Centre recently introduced the PM E-DRIVE Scheme in October with a budget of Rs 10,900 crore to accelerate the adoption of electric vehicles, establish charging infrastructure, and enhance the EV manufacturing ecosystem in India. The scheme will be active from October 1, 2024, to March 31, 2026.
Furthermore, the EMPS-2024 (Electric Mobility Promotion Scheme) running from April 1, 2024, to September 30, 2024, will be incorporated under the PM E-DRIVE scheme. The subsidy for electric two-wheelers under this scheme is determined at Rs 5,000 per kilowatt hour based on battery power, with a maximum incentive of Rs 10,000 in the initial year. This amount will be reduced by Rs 2,500 per kilowatt hour in the second year, capped at Rs 5,000 overall.
Electric scooter manufacturers like Ola, TVS, Ather Energy, Hero Vida (Hero Motocorp), and Chetak Bajaj currently offer models with battery capacities of 2.88-4 kWh, priced between Rs 90,000 to Rs 1.5 lakh.
Through the PM E-DRIVE scheme, subsidies and demand incentives totaling Rs 3,679 crore have been allocated to encourage the adoption of electric two-wheelers, three-wheelers, ambulances, trucks, and other emerging electric vehicles (EVs). The program aims to support 24.79 lakh electric two-wheelers, 3.16 lakh electric three-wheelers, and 14,028 electric buses.
Under this scheme, three-wheelers, including e-rickshaws, will receive a demand incentive of Rs 25,000 in the first year, which will be reduced to Rs 12,500 in the second year. Cargo three-wheelers in the L5 category will receive a benefit of Rs 50,000 in the first year and Rs 25,000 in the second year.