Uttar Pradesh Electric Vehicles Manufacturing and Mobility Policy 2019

Electric Vehicles are widely gaining market across the globe. Due to the high pressure and fast depletion of fossil fuels, electric mobility has become necessary to reduce the impact of transportation on the 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 the automotive industry aims at achieving the set objectives by decarbonizing the transport system.

Electric Vehicles

The Indian automobile industry is one of the largest growing industry in the world, and the sector promises further growth in the manufacturing sector driving the country’s economic growth. Since presently the automobile industry largely contributes to pollution, the government is promoting electric mobility towards this.

In 2018, the global electric car fleet exceeded 5.1 million from 2 million in the previous year and almost doubling the number of new electric car sales. With rapid expansion in electric mobility, the private and public charging infrastructure has been continuously expanding. The annual growth rate of publicly available charging infrastructure was higher than the electric car stock growth rate on a global level.

The Electric Vehicle market in India is set to go enormous and is estimated to be around 80 lacs by 2020, and approximately 5 crores by 2030. Prices of Lithium Batteries are rapidly going down, thereby making EVs cheaper. Electric Vehicles Storage Opportunities (in GW) in India are anticipated to grow at a CAGR of 44% by 2022.

In a recent report published by FICCI and Rocky Mountain Institute, it has been estimated that India’s shift to shared, electric and connected mobility could help save up to INR 20 Lakh Cr in oil imports and nearly 1 Giga Tonnes of carbon dioxide emissions by 2030. The report further states that the sales of 4-wheel EVs are expected to exceed that of internal combustion engines (ICEs) in India by 2027.

In order to boost the manufacturing of hybrid and electric vehicles in India, the Government 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 the 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. Extending the Scheme, the Government of India has come up with FAME II, and National Mission on Electric Mobility & Battery Storage has been launched.

Indian automobile industry became the 4th largest in the world by producing a total of nearly 30.92 million vehicles including passenger vehicles, commercial vehicles, three-wheelers, two-wheelers in April-March 2019 as against 29.09 million in April-March 2018 registering a growth of 6.26% over the same period last year. Domestic automobile production increased at 7.08 % CAGR between FY 2013-18.

India is also a prominent auto exporter where automobile exports grew 15.54% during April-March and now the country is also on course to become the third-largest producer of cars in the world. Transforming this large sector, the Government of India is determined to curb polluting emissions from the automobile industry and envisions switching to 100% hybrid or electric vehicles by 2030.

Advantage Uttar Pradesh

Since Uttar Pradesh is the country’s largest consumer base, the Electric Vehicle market is set to boom in the State. Uttar Pradesh is the country’s 4th largest economy, contributing nearly 8% to the country’s GDP. Uttar Pradesh is amongst the top 5 manufacturing states and has the highest number of MSME units with a strong foothold in the automobile industry.

Electric Vehicles

Enabling Infrastructure

Strategically located along the Golden quadrilateral, the State is well connected to major national and international airports. 57% catchment area of the Eastern Dedicated Freight Corridor (EDFC) passes through UP and connects to the eastern part of the country. Similarly, 8.5% catchment area of the Western Dedicated Freight Corridor (WDFC) falls in UP. Nonetheless, the upcoming international airport at Jewar will be the country’s largest international airport in North India.

Known as the State of Expressways, the existing Yamuna and Agra-Lucknow Expressway connect the NCR to the State capital. To add to this advantage, Poorvanchal Expressway, Bundelkhand Expressway, is coming up to ensure seamless connectivity to eastern and central India. The NW 1 waterways connecting Allahabad to the Haldia seaport is a unique project connecting the State export hubs to the eastern ports. With an existing strong logistics infrastructure, Uttar Pradesh is coming up with multi-modal logistics/ transport hubs at Noida, Boraki, and Varanasi.

Large Market Base Home to nearly 16.5% of India’s population, the state is a promising market for the automobile industry. The state ranks 3rd in the number of vehicles registered in India, sharing 10.3% of total vehicles registered in India (2012). Almost 81% increase in vehicle registration was accounted for in the state between 2010 and 2015.

The demand for motor vehicles can easily be gauged by the no. of registrations for authorized drivers in the state. No. of authorized driving licenses issued by the Transport department in the state was nearly 1.39 million in the year 2015, which makes it one of the largest consumer bases in the country.

With a growing middle class the automobile industry in India is all set to become the largest sector in the Indian economy. With 34% of Indians living in urban areas, India is rapidly urbanizing. The decadal growth rate in the urban population is nearly 31% (2001- 11). With 44.4 million urban populations, Uttar Pradesh constitutes nearly 12% of the total Indian urban population. Uttar Pradesh has a high percentage of urban population to total population in the State at 22.27% (Census 2011) and is continuously rising.

As the cost of running the EVs is as low as INR 1 per km and that of petrol vehicles is about INR 5.5 per km, it shows great running economics for the owners of Electric Vehicle EVs. Given the transition process to boost electric vehicle mobility, Uttar Pradesh has been the 3rd largest beneficiary under the FAME scheme (2019) and has the highest registered EVs amounting to 1.39 Lakh.

The State’s capital – Lucknow is one of the 10-cities identified for the pilot project of Multi-Modal Electric Public (Electric Vehicle)Transport under the FAME India Scheme of the Government of India. The e-rickshaw market is already booming in the State, and transition to EVs in 2-wheelers, 4-wheelers, and specifically in the public transportation sector will be witnessed gradually.

Key Investment Zones

The industrial corridors in the NCR region, including Noida Industrial Area, Greater Noida Industrial Area, and Yamuna Expressway Industrial Area, and state capital Lucknow are major contributors to the growth of the automobile industry in UP. Uttar Pradesh shares a considerable part of NCR Cluster of Automobile, Electric Vehicle & Automobile components manufacturing hub, and hosts manufacturers including India Yamaha Motors, Honda Siel Cars India, New Holland Agriculture/CHN, etc. at Greater Noida, and Tata Motors at Lucknow. In 2016, Tata motors launched Hybrid Electric buses for which the module was designed in their Lucknow plant. Besides, given to the large SME manufacturing base in the automobile sector, Kanpur, Lucknow, Noida, Ghaziabad, Aligarh, Agra, Meerut, Jhansi are other investment zones. Other zones involved in manufacturing batteries in the State are located across Greater Noida, Ghaziabad, Fatehpur, Kanpur, Lucknow, Gorakhpur, etc.

Key Opportunities

Automobile & Components Manufacturing – Manufacturing Hybrid Electric, Plug-in Electric Vehicle, Electric Vehicle Mftg & Components such as motors, power electronic kits, etc.

Battery & Battery parts Manufacturing Including R&D

Charging Infrastructure •Fast charging Station •Slow charging Station •Battery swapping station

About Policy

Towards this, the Uttar Pradesh Electric Vehicles Manufacturing and Mobility Policy 2018 provides attractive fiscal and non-fiscal to attract investments to promote Electric mobility in the state. The policy also promotes early adoption of EVs in the state as well as creates demand in the sector. Therefore, the policy contains 3- components:-

(1) Manufacturing

(2) Charging infrastructure

(3) Demand Creation.

This policy complements the UP Industrial Investment and Employment Promotion Policy (UP IIEP), 2017. Besides the department of infrastructure & industrial development, the department of transport, the department of power, and the department of urban development play a pivotal role in the implementation of this policy.

Policy Targets

  • To attract investments of over INR 40,000 crore in the next 5 years across the electric mobility ecosystem with an employment potential for 50,000 people
  • To launch 1000 electric buses (BEVs/FCEVs), and achieve 70% EV public transportation on identified green routes in identified 10 EV cities by 2030.
  • To phase out all conventional commercial fleets and logistics vehicles and achieve 50% EV mobility in Goods Transportation in identified 10 EV cities by 2024 and all cities by 2030.
  • To roll out nearly 10 lakh EVs, combined across all segment of vehicles, by 2024.
  • To bring in manufacturing units of high density power storage of at least 5GWh capacity in the next 5 years for smooth electric mobility
  • To set up nearly 2 lakh slow and fast charging, swapping stations by 2024

Fiscal Incentives

Incentives to manufacturing units (EVMUs and EBUs) –

Land Subsidy – Mega Anchor Project and Ultra mega battery plant as defined in this policy will be reimbursed up to 25% of the cost of land at prevalent circle rate or purchase price, whichever is less. This incentive will be provided only on land purchased in the notified areas in Uttar Pradesh. Such notification will be issued by the Government of Uttar Pradesh from time to time.

The defined Large, Anchor EVMUs/EBUs and MSME units will be provided incentives at par with those provided to industrial units under UP IIEPP 2017. These incentives include capital interest subsidy, infrastructure interest subsidy, industrial quality subsidy, Stamp duty, and electricity duty exemption, SGST reimbursement, etc.

Technology Transfer for alternate Clean Fuel Mobility – EBUs manufacturing alternate clean sources of fuel for electric mobility, including hydrogen-based fuel cells or methanol/biofuel based fuel cells or solar-based cells, etc. will be supported in technology transfer –

Anchor EBUs will be reimbursed 100% cost of technology transfer towards the first 5 vendor units and 75% towards the next 5 vendor units, subject to a maximum of INR 50 lakh towards each vendor unit in the same cluster.

Ultra mega Battery plant will be reimbursed 50% cost of technology transfer, subject to the maximum ceiling of INR 10 lakh per annum and an overall ceiling of INR 50 lakh. Only 5 such projects will be considered over the period of this policy.

Ease of business

Taking forward the vision and mission of the 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 a single-window system of the state directly monitored by the Chief Minister’s office.

Single Sanction: All incentive payments in the form of reimbursement, subsidies, etc. under the policy will be made with a single sanction order and from a single head of account by the nodal agency.

Simplifying procedures – This policy ensures to rationalize existing regulatory regimes and simple procedures by supporting self-certification, deemed approval, and third-party certification. Towards this goal, the Government of Uttar Pradesh will regularly review all its existing acts, rules, and procedures related to industrial services/ clearances/ approvals/ permissions/ licenses and wherever possible.

Quality Power- The government of Uttar Pradesh is committed to supplying 24X7 reliable, quality power to the EV/EV Battery manufacturing industry as per provisions in Industrial Investment & Employment Promotion Policy 2017.

Power Permits- DISCOM shall release supply to charging/battery swapping stations within 15days of application. Municipalities shall issue provisional permissions online immediately to set up charging/battery swapping stations. Any verification shall only be post-sanction of provisional permission.

Industrial Security – The government of Uttar Pradesh will provide a safe and secure industrial environment in the state. Towards this, a dedicated police force headed by specialized officers will be deputed at industrial clusters/ areas in regions and an integrated police cum fire station will also be established.

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