All in all, it is a policy enabling supply side of the value chain, as well as supporting buyers of EVs with the ‘feebate’ incentive structure
The Punjab government released the Punjab Electric Vehicle Policy 2022 last week. Among the goals of this policy mentioned by the government, reducing air pollution receives the first mention, thus illustrating the Punjab government’s commitment to fighting worsening air quality in North India.
It is impossible to not draw parallels with AAP-led Delhi government’s EV policy, which intends to deploy 25 per cent of all new vehicles to be battery-operated vehicles by 2024.
The top five cities with maximum vehicular emissions in Punjab are Ludhiana, Jalandhar, Patiala, Amritsar and Bhatinda. Additionally, Mohali lies on the route of a large amount of inter-state vehicular traffic. These cities have been targeted in the policy.
The policy proposes a combination of fiscal and non-fiscal incentives for electrification of two-wheelers, three-wheeler public transport and goods carriers. There will be incentives of up to Rs 30,000 for buyers of the first 10,000 electric autorickshaws and e-rickshaws as well as 5,000 e-cars; Rs 30,000-50,000 incentives for the first 5,000 light commercial vehicle (L5N and N1 category) buyers.
These incentives will be doled out in the form of what the government calls a ’feebate’ structure. This means that while polluting vehicles will incur a fee, efficient ones will receive a rebate. The policy will exempt electric vehicles (EV) from payment of registration fee and road tax.
Category N1 vehicles are commercial goods carriers that have a weight of up to 3.5 tonnes. Incentivising vehicles of this weight grade creates hope in the battery industry and gives impetus to addition of more gigawatt hours of battery manufacturing capacity.
The policy reported at least 2,500 new registered e-rickshaw sales during financial years 2014-21. However, the report, in the same vein, talks about a larger presence of unregistered e-rickshaws plying on the roads, thus boasting of more than above-mentioned electronic three-wheeler sales.
The government has promised to come up with a detailed battery scrapping policy supporting the EV buyers in disposal of their used vehicles.
There is talk of deployment of different types of EV charging and battery swapping infrastructures owned by both the government and private parties.
There are attractive incentives for EV and ancillary manufacturing units to be established in the state. These include concessional land, 100 per cent electricity duty exemption and industrial hubs. The state aims to promote EV manufacturing, with special focus on e-tractor manufacturing.
There is a proposal of developing a Centre of Excellence in e-mobility, in partnership with academia / industry to enable ‘design, development and validation’ of EVs. The policy talks of incentivising start-ups and skilling initiatives.
All in all, it is a policy enabling supply side of the value chain, as well as supporting buyers of EVs with the feebate incentive structure. Since it coincides with the Union government’s doubling of FAME II budget and extension of timeline, the industry is likely to invest in the idea.
However, it remains to be seen whether such cajoling will result in the desired fleet electrification or the lack of directive mandates will slow it down.
Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth.
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