Draft of Uttar Pradesh’s EV Manufacturing Policy 2018

ELECTRIC VEHICLES

Draft of Uttar Pradesh’s EV Manufacturing Policy 2018

Energetica India

Uttar Pradesh (UP) State is determined to strengthen and expand the industrial base in the Uttar Pradesh, and has therefore launched its industrial investment and employment promotion policy 2017. Taking this forward, this electric vehicles manufacturing policy supports the expansion of eco-friendly automobile industry in the Sttae and opens the market for electric vehicles manufacturing here, supporting the set targets of Government of India

Electric Vehicles are widely gaining market across the globe. The automotive industry is rapidly shifting from traditional fuel based technology to eco-friendly technologies. Due to high pressure and fast depletion of fossil fuels, electric mobility has become necessary to reduce impact of transportation on environment and climate change. The recent Paris Agreement enforced in November 2016 provides to limit carbon dioxide emissions to control global warming and threats of climate change. Electrification of automotive industry aims at achieving the set objectives of decarbonising the transport system.

In order to boost the manufacturing of hybrid and electric vehicles in India, Govt of India has launched The Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME scheme) in 2015, under National Electric Mobility Mission Plan (NEMMP) with an aim to promote eco-friendly vehicles in country. It has set an ambitious target of 6-7 million sales of hybrid and electric vehicles year on year from 2020 onwards in India, thereby creating wide opportunities in EV manufacturing.

With Uttar Pradesh being country’s largest consumer base, the electric vehicle market is set to boom in the State as well. The State’s capital is one of the 10-cities identified for pilot project of multi-modale electric public transport under FAME India Scheme. The e-rickshaw market is already booming in the state, and transition in 2-wheelers, 4-wheelers and specifically in public transportation will be witnessed gradually.

The state is determined to strengthen and expand the industrial base in the Uttar Pradesh, and has therefore launched its industrial investment and employment promotion policy 2017. Taking this forward, this electric vehicles manufacturing policy supports the expansion of eco-friendly automobile industry in Uttar Pradesh, and opens the market for electric vehicles manufacturing here, supporting the set targets of Government of India

Objectives of the Policy

To establish Uttar Pradesh as preferred destination for attracting investments in manufacturing of EVs

To create employment opportunities both from supply side and demand side.

To create a conducive environment for shift from Internal Combustion (IC) engines to EVs

To encourage use of hybrid EVs in Uttar Pradesh during the transition phase.

To develop human capital and augment the power capacity to meet the needs of the industry promoting electric mobility in the state

This policy will remain in force for the period of 5 years

Policy Framework

Transition to Electric Vehicles

In order to favour transition from combustible vehicles to EV vehicles, the State government  will promote hybrid vehicles and give incentives to boost demand of EVs in the state. In the transition phase, the State will encourage use of EVs in public transportation and goods transportation.

Public transportation - In order to promote EV vehicles in public transportation, 1000 EV buses will be introduced by the State by 2030, in phases. 25% in phase I by 2020, remaining 35% in phase II by 2022, and rest 40% in phase III by 2030.

Further, green routes will be identified by 2020 in GB Nagar, Ghaziabad, Lucknow, Kanpur, Varanasi for 100% EV public transportation.

Private transportation - State Govt will encourage electric 2-wheeler taxies for short distance mobility, and existing auto rickshaws will be encouraged to resort to EV technology

Further, auto rickshaws, cabs, school buses/vans, etc will be targeted to achieve 100% electric mobility by 2030 in five cities - GB Nagar, Ghaziabad, Lucknow, Kanpur, Varanasi.

Goods transportation - Further, to promote adaptability of EV in goods transportation, EV-3 wheelers, 4-wheelers mini goods vehicles will be encouraged in GB Nagar, Ghaziabad, Agra, Lucknow, Kanpur, Varanasi and Jhansi.

The state government will also promote EV battery and charging equipment manufacturing. The State will incentivise manufacturing of lithium batteries with higher mileage per charge. There will also be incentives for manufacturing of hydrogen-powered fuel cells and solar  powered cells, as an alternative clean energy source.

Charging Infrastructure

The state government will develop charging infrastructure as a commercially viable business venture in the state.

Public Sector units will be encouraged in setting up charging infrastructure in the state. State will facilitate land to such PSUs at concessional rates in designated areas.

Charging infrastructure in public buildings, public places shall be developed, and ensure provisions to set up charging outlets, regular electric supply, etc.

In addition to these, to promote EV mobility on prominent highways, such as Yamuna Expressway, Agra-Lucknow Expressway with heavy density of vehicles, will be provided fast charging stations, battery swapping infrastructure, at every 50kilometers.

New apartments, high rise buildings, technology parks in the state will be provided charging infrastructure for EVs. Nonetheless, the state will encourage creation of secondary market for disposal of EV batteries in PPP model.

The policy encourages clean fuel and renewable energy based charging/battery swapping station – for hydrogen powered fuel cells, or solar powered cells.

The State would like to encourage private players to set up EV charging systems and infrastructure in the state. The policy also would facilitate electricity supply to charging stations at commercially viable rates. Special power tariff policy will be introduced by depearmtnet of Power

Hybrid EVs (HEVs) during transition phase

HEVs are combinational vehicles from both internal combustion engine propulsion system and electric motor propulsion system. Use of HEVs not only reduces the air pollution in the environment, also helps in conservation of natural resources. Therefore, State of UP will encourage use of HEVs during the transition phase in the state so as to overcome the barriers in migrating to EVs from ICE Vehicles upto 2022. Thereafter, the State aims at promoting use of methanol fuel cell vehicles, to smoothen transition and reduce pollution.

EV Manufacturing Zones/Parks

The State ensures quality infrastructure with comprehensive facilities to develop the state as EV manufacturing hub. Industrial land shall be made available to be developed as clusters and zones for EV manufacturing. These zones/parks/clusters will be well equipped with infrastructure including power, water, sewage treatment, testing facilities, etc.

Use of Clean Fuel

Since the prime objective of promoting electric vehicles is to de-pollute the transportation system, it is important to reduce the dependency of EVs on traditional sources of electricity. Adopting a more sustainable approach, Govt of Uttar Pradesh aims at promoting use of clean fuel for EVs under this policy. Therefore, in the transition phase the state shall promote use of methanol fuel cells for electric hybrid Cars. Further, to overcome the hazards of lithium batteries, the State aims at promoting development and use of hydrogen powered fuel cells, and more particularly, Solar-powered cells,and service providers will be encouraged.

Research and Development

With advent of modern technologies, it is important to encourage participation of academia, industry in adapting to low cost technologies, smart design and promoting transition to EV vehicles in the state. This includes development of Battery technologies, charging infrastructure, certification and training. The R&D ecosystem support in Uttar Pradesh will largely emphasize development of clean fuel technologies in EVs.

Start up and Innovation

To strengthen the research ecosystem promoting EV manufacturing and developing the technology in the state, the State will also emphasize startup and innovation in this field. Electric Vehicle Incubation centres will be set up at IIT-Kanpur, and other leading engineering institutions to facilitate EV mobility and encourage business models on EVs. Start up Fund created under UP Startup Policy 2017 shall also be put to use to promote Startups in this context.

Skill Development

Taking this ahead, in order to augment the manpower requirements of the industry, EV Skill centres will be set-up in collaboration with the industry. Sectoral curricular and courses will be introduced in professional institutes, polytechnics and other vocational education institutions. Even short term courses on electric mobility, repair and maintenance, battery manufacturing and maintenance will be introduced. Further, fiscal incentives will be given to trainees/students, manufacturers providing training.

Augmenting the Power Capacity

Higher market penetration of EVs will put pressure on the existing electricity supply, particularly on low voltage (LV) distribution grid. Presently, the power deficit in the state is improving, but still persists. As against 107569 MU required, only 105700 MU power supply is available in the state (2016-17). The peak demand in Uttar Pradesh is the second highest in the country after Maharashtra at 17183 MW in 2016-17. Therefore, in order to meet the rising power demands, the State will endeavour to augment power supply in the state.

Sustainable Ecosystem support

In order to meet the rising power demands for EVs, the State will achieve demand side management through smart metering systems, variable tariff rates, and off-peak battery charging. serviceproviders for EVs in the State will be encouraged through variable tariff rates to use electricity supply from solar grid. Further, the Govt of Uttar Pradesh will encourage smart chargers and mass charging stations. Therefore, service providers installing charging infrastructure at Parking spaces, developing common parking spaces at particular zones where most offices are located, and other common charging spaces at public places, will be encouraged.

Private EV Parks (PEV Parks)-Both Manufacturing and Assembling units

Both manufacturing and assembling units Govt of Uttar Pradesh incentivises PEV parks developed on atleast 100acres of land area in NCR districts and Kanpur, and minimum 150 acres in other districts, by private developers. These parks will be given following incentives as under UP Industrial Investment and Employment Promotion Policy 2017

Interest subsidy in the form of reimbursement of interest of up to 50% of annual interest on the loan taken to buy land, calculated on the basis of prevalent circle rate, for 7 years subject to a maximum ceiling of INR 50 lacs/per annum/per PEV park.

Interest subsidy in the form of reimbursement of interest of up to 60% of annual interest for 7 years on the loan taken for building supporting infrastructure at the PEV parks subject to maximum limit of INR 10 crore per year with an overall ceiling of INR50 crore per PEV-park.

Interest subsidy in form of reimbursement of interest of upto 60% of annual interest for 7years on loan taken for building hostel/dormitory housing for workers at the PEV park, subject to INR 5crore per year, with overall maximum limit of INR 30 crore per park.

The developer shall be eligible for reimbursement of 100% stamp duty paid on purchase of land for building the PEVM Park, and 50% exemption on stamp duty to first individual buyers of the plots at the park.

Incentives

The EVMUs and/or EBUs or MSME units shall be eligible for incentives on case to case basis as under UP Industrial Investment and Employment Promotion Policy 2017. These incentives include -

Capital interest subsidy to the extent of 5% per annum for 5years in the form of reimbursement on loan taken for procurement of plant & machinery, subject to an annual ceiling of INR 50lacs.

Infrastructure interest subsidy - Both EVMUs and EBUs setup in the state, will for a maximum period of 5 years be reimbursed the amount of interest at the rate of 5% per annum payable on loan taken by them for developing supporting infrastructure such as self use roads, drainage, powerlines, etc. The overall ceiling limit of the same will be INR 1crore.

Industrial research subsidy for procurement of plant and machinery for industrial research, quality improvement and setting up testing labs, quality certification labs, tool rooms, etc. 5% per annum subsidy in form of reimbursement on interest on loan taken for the mentioned purpose, subject to maximum ceiling of INR 1 crore per unit.

Electricity duty exemption: All new EVMUs and EBUs as defined under the policy will be exempted from paying electricity duty for first 10years.

Stamp duty reimbursement - 100% Stamp duty will be reimbursed to all new units in EV sector as defined under this policy for purchase of land in Bundelkhand&Poorvanchal, 75% in Madhyanchal&Paschimanchal region of the state (except Gautambuddhnagar& Ghaziabad districts) 50% in Gautambuddhnagar& Ghaziabad districts.

EPF reimbursement facility to the extent of 50% of employer’s contribution to all such new units in EV sector providing direct employment to 100 or more unskilled workers, and additional 10% of employer’s contribution on direct employment to 200 skilled and unskilled workers.

SGST reimbursement – 90% for SGST reimbursement for MSME and Large Units for 5years in EV sector, 70% reimbursement to Mega EVMU and EBUs for 10years.

EV mobility incentives

In order to induce demand and create market for EVs in the state, the government will extend following incentives

Tax exemptions to buyers – 100% exemption of road tax on Transportation EVs purchased within Uttar Pradesh, applicable over the period of this policy. Other buyers will be fully exempted from paying Vehicle registration fees of EVs manufactured within the State. Further in this context, state will exempt SGST on purchase of electric vehicles manufactured within the state.

100% Interest free loans to State Government employees for purchase of EVs in the state.

30% subsidy on road price of EV in form of reimbursement to Individual families with Single-girl child in the State on purchase of EVs, applicable over the period of this policy.

Incentives to service providers – The Service units as defined under this policy will be provided following incentives -

Service units setting up charging stations with capital investment of more than INR 25lacs but less than INR 5crore, will be provided capital interest subsidy @5% per annum for 5years in the form of reimbursement on loan for procurement of plant & machinery and setting up charging infrastructure (excluding land cost) subject to maximum ceiling of INR 10lacs per annum per unit.

Service units setting up charging stations with capital investment of less than INR 25lacs, will be provided capital interest subsidy @5% per annum for 5years in the form of reimbursement on loan for procurement of plant & machinery and setting up charging infrastructure (excluding land cost) subject to maximum ceiling of INR 2lacs per annum per unit.

All the defined service units will be eligible for 100% exemption from paying electricity duty for 10years.

Environment Protection Incentives

Since electric vehicle and battery manufacturing industry is polluting in nature, it is important to induce eco-friendly manufacturing in the State. Therefore, Govt of Uttar Pradesh provides following incentives in this context under this policy –

Common Effluent Treatment Plant – The developers will be provided incentives for setting common Effluent Treatment Plant (ETP) at Private Electric Vehicle (PEV) Manufacturing/ Assembling Parks. They will be eligible for 50% reimbursement of interest on loan taken to set-up such common purpose ETP, for 7years subject to a maximum ceiling of INR 5 crore per project.

Setting up ETPs – Units setting up ETPs will be reimbursed –

 50% interest on loan taken for 7years to set-up ETP to EVMUs upto maximum INR 1 crore per unit,

 50% interest on loan taken for 7years to set-up ETP to EBUs upto maximum INR 75lacs per unit.

Capacity building

Skill Development Institutes giving skill training in EV and battery repair, maintenance, etc. will be reimbursed 20% of expenditure incurred in imparting such training over the period of this policy. Also, stipend at the rate of INR1000 per trainee per month over 6months will be provided to the trainees undertaking such skill development courses over the period of this policy.

Green Innovation Incentives –R&D in EV sector to adopt sustainable practices, particularly, renewable energy based fuel-cells such as solar powered batteries, hydrogen powered batteries will be incentivised. 5% subsidy in form of reimbursement on interest on loan taken for setting up such technologies or innovation centres at electric vehicles manufacturing Parks and zones in the state, subject to maximum ceiling of INR 1 crore per project.

Ease of Business

Taking forward the vision and mission of state’s Industrial Investment and Employment Promotion (IIEP) Policy, 2017, this policy also ensures ease of business in the state.

Single Window – All required approvals to EV manufacturing/ EV battery manufacturing units and service providers shall be provided under one roof through single window system by NiveshMitra. For this, a dedicated nodal officer shall be provided to each unit.

Time bound clearances – Providing speedy and time bound clearances are one of the prime intention of this policy. Towards this goal, the GoUP will regularly review all its existing acts, rules and procedures related to industrial services/ clearances/ approvals/ permissions/ licenses and wherever possible.

Simplifying procedures – This policy ensures to rationalise existing regulatory regime and simply procedures by supporting self-certification, deemed approval and third party certification.

Ease of Commercial Business – The business interests of new units will be protected and will be provided conducive environment.

Industrial Security – Govt of Uttar Pradesh will provide safe and secure industrial environment in the state.

 

Source: “Uttar Pradesh Electric Vehicles Manufacturing Policy 2018.”

| Article published on 24/07/2018 by Moulin

 
 
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