INTRODUCTION

In response to the rapid increase in the number of vehicles in Haryana and the associated environmental and health concerns, the Haryana Government has introduced the Haryana Electric Vehicle Policy (“EV Policy”). The primary goal of the EV Policy is to encourage and incentivise the manufacturing of electric vehicles (“EVs”) and their components within the state, with a particular focus on batteries, to reduce business costs. The EV Policy also emphasizes the development of charging infrastructure, human capital, and research and development in green automotive technology, aiming to create a comprehensive ecosystem for electric mobility.

KEY FEATURES OF THE POLICY

a. Objectives:

The EV Regulations in India aim to promote clean transportation. Hence, the EV Policy envisions Haryana as a global hub for manufacturing EVs, their major components, and batteries, with a focus on generating employment opportunities. Additionally, it emphasizes the importance of promoting Research and Development (“R&D”) to drive innovation in electric mobility. Overall, the EV Policy aims to create a sustainable and thriving ecosystem for the electric mobility sector in Haryana.

b. Eligibility:

The EV Policy applies to new and existing units in specified blocks and government-approved industrial estates. Existing units seeking incentives must meet expansion, diversification, or conversion criteria, including a 50% additional investment in the EV sector. The EV Policy offers incentives to manufacturers, buyers, and charging infrastructure establishments, with large and Mega units requiring battery disposal/recycling facilities to qualify. 

Note: Units utilising specific incentives under the EV Policy cannot receive similar incentives in other Haryana Government policies. However, they can be eligible for other incentives not specified in the EV Policy. Incentives are permitted to be combined with other Government of India schemes.

c. Incentives for Manufacturers:

Manufacturers of EVs, charging infrastructure, and components for EVs are eligible for incentives under the EV Policy. Micro, small, medium, and mega industries will receive 25%, 20%, and 10% of the Fixed Capital Investment (“FCI”), respectively. A seed fund of 25% of the book value of the plant and machinery will be made available to current units switching to EV manufacturing. The government also provides 50% reimbursement for EV industries for 10 years or until FCI is achieved, and 100% stamp duty reimbursement for EV manufacturing, components, batteries, and charging infrastructure post-production. Power subsidies and incentives are also available. Water treatment plant costs are reimbursed up to INR 50 lakh. Patent registrations are covered up to INR 25 lakh. Manufacturing units are also being offered employment generation subsidies for capacity building equivalent to INR 48,000 per employee per annum for 10 years, for employees who are residents of Haryana.

d. Incentives for Buyers:

The EV Policy offers individual benefits to EV buyers, under the categories not covered by the Government of India’s FAME Scheme – Phase II.  The first 1000 electric cars, 200 hybrid electric cars, and 200 hydrogen-based vehicles will receive 15% incentives up to INR 6.00 lakh, INR 3.00 lakh, and INR 10.00 lakh, respectively. The state offers a 50% incentive for the first 1000 electric tractor units and a 10% incentive for electric buses. Electric vehicles are exempt from motor vehicle taxes under the Haryana Motor Vehicle Tax Act, 2016. The EV Policy provides a 100% exemption on Motor Vehicle Tax for the first 30,000 electric 2-wheelers, 15,000 electric 3-wheelers, 10,000 electric 4-wheeler/hydrogen fuel-based vehicles, and 2,500 hybrid electric 4-wheeler vehicles, and 75% exemption for electric buses for the first 1,000 vehicles purchased during the EV Policy period. The EV Policy offers discounted registration fees for all-electric, hybrid, or hydrogen-electric vehicles. The first 30,000 vehicles get INR 200 for electric 2-wheelers, INR 200 for the first 15,000 electric 3-wheelers, INR 500 for the first 10,000 electric 4-wheelers, INR 500 for the first 2,500 hybrid electric 4-wheelers, and INR 500 for first 1,000 electric buses.

e. Development of EV Charging Infrastructure:

The Government of Haryana aims to boost EV adoption by ensuring ample charging infrastructure. Initiatives include mandatory provisions in building codes for charging stations in residential and commercial areas and the promotion of EV adoption in green belts. The plan involves developing charging infrastructure in public buildings, parking areas, and bus depots, encouraging PSUs to set up charging stations, and promoting privately owned charging stations and battery-swapping facilities. The state’s strategy includes fast charging stations every 30 km on highways, collaboration with oil companies for inter-city routes, and incentives for solar-powered charging stations.

f. Incentives for Privately Owned Public Charging Stations/Privately Owned Battery Swapping Stations:

The EV Policy offers incentives to charge infrastructure development for areas not covered by the FAME Scheme – Phase II. For the first 100 Battery Swapping Stations with a (FCI) over INR 50 lakh, a one-time subsidy of 20% of FCI up to INR 10 lakh is offered. In addition, the first 200 privately held public charging stations with an FCI greater than INR 25 lakh are eligible for a 20% subsidy, with a ceiling of INR 5 lakh. A one-time subsidy of 20% of FCI up to INR 50,000 is provided for the first 2,000 privately held public charging stations in high-density regions, if there are at least 10 charging units in the specified space, meeting public demand.

g. Human Capacity Building:

The Haryana Renewable Energy Development Agency (HAREDA) will organise skill development training and Information Education Communication (IEC) campaigns, with a focus on repair courses for EVs. Furthermore, the state will encourage the establishment of Centers of Excellence (CoEs) by government entities and private companies, offering a 50% grant of project cost up to INR 5 crore, distributed over five years, to enhance skilled employee availability for EV manufacturers and promote youth skill development in alignment with National Skill Development Corporation Guidelines, with potential incentives from the Government of India.

h. Research and Development:

In collaborating with organisations, the Government of Haryana is aiming to promote EV research and will provide incentives including a 50% project cost subsidy (up to INR 1 crore for electric charging technology and up to INR 5 crore for electric car technology). A one-time subsidy of INR 25 lakh will be given to the first 20 educational institutions that put up R&D facilities, and the first 10 dedicated research institutes will receive an incentive of INR 5 crore. 

i. Demand Creation:

The Government of Haryana is aiming to lead in electric vehicle adoption, declaring the year as the “Year of the Electric Vehicle.” This includes prioritising EVs in new vehicle acquisitions, installing public charging stations, and designating Gurugram and Faridabad as model electric mobility cities. Additionally, Haryana State Transport Undertaking plans to convert 100% of its bus fleet to electric or non-fossil-fuel-based technologies by 2030, with a phased approach to achieving this target.

j. Awareness:

The public is urged to use EVs through test rides and collaborations with manufacturers. State departments will provide volunteers for campaigns, and the Bureau of Energy Efficiency will support the Go Electric campaign. Local officials will be trained on EV requirements and charging infrastructure.

k. Period of Policy:

The EV Policy shall be valid for 5 years from the date of notification of the EV Policy in the official gazette.

CONCLUSION

As an energy, sustainability, and mobility law firm that advises multiple clients who are stakeholders in the electric mobility sector, the EV Policy is a welcome step. The cities of Gurgaon and Faridabad are major business hubs that could benefit from the widespread adoption of electric mobility. To this end, the EV Policy underscores the importance of leveraging Haryana’s existing strength in the automotive manufacturing sector to support the local production and adoption of EVs. The emphasis on charging infrastructure, R&D incentives, and human capacity building further solidifies the state’s commitment to building a sustainable and thriving EV ecosystem.