UT Electric Vehicle Incentives Face Central Approval Hurdle

The UT administration’s drive to speed up electric vehicle (EV) uptake in the city has encountered an administrative snag. Although it approved higher subsidies and incentives across several EV segments in August, the rollout is on hold following a recent order that mandates central government clearance. While certain tweaks — such as raising the allocation for e-cars — could be approved locally, wider implementation now rests on the Centre’s approval, which may delay the intended benefits designed to increase EV adoption in the area.

“Under the Chandigarh EV Policy 2022, a number of monetary incentives were introduced to spur greater adoption of EVs among city residents. These were further enhanced following a UT decision in August, but they have not been put into effect due to the absence of sanction from the competent authority. There may be a significant delay in securing approvals now, since these will require the Centre’s consent,” said a UT official.

On one element of the subsidy, which pertains to raising the number of cars eligible for incentives, the administration is taking a decision at its own level. “Initially, according to the EV policy, the first 2,000 four-wheel electric cars were to get an incentive of up to Rs 1.5 lakh at Rs 5,000 per kWh of fixed battery capacity. The quota of 2,000 was exhausted in November last year. Since then, registrations of e-cars have fallen sharply. The UT Electric Vehicle Advisory Committee resolved in August to raise the quota by another 1,500 vehicles. The car quota was increased by trimming the quota for two-wheelers receiving incentives. As this is not a fresh introduction but a reallocation, the administration is considering approving it at its own level,” the official said.

The UT Electric Vehicle Advisory Committee also decided to promote e-2-wheelers by adding an insurance incentive. For e-bikes priced up to Rs 1.5 lakh, an insurance subsidy of up to Rs 5,000 was approved. The maximum cash incentive for e-cycles was set to be raised from Rs 4,000 to Rs 6,000. The first 25,000 e-bicycles purchased during the policy period will receive 25% of the cycle’s cost, subject to the upper cap.

Incentives for e-2-wheelers were decided to be raised from ₹5,000/kWh to ₹10,000/kWh, up to a limit of ₹30,000 per vehicle. To promote women’s participation in EV adoption, female buyers of e-2-wheelers will be eligible for an increased subsidy of ₹12,500/kWh, subject to a maximum of ₹37,500 per vehicle.

The UT Electric Vehicle Advisory Committee meeting was held under the chairmanship of UT Chief Secretary Rajeev Verma on July 31. Various facets of the EV policy, including expanding incentives, development of EV charging infrastructure, and progress to date, were discussed. The final decision on the incentives was forwarded to the UT Administrator.

The administration aims to reach an EV penetration of 18% by the end of the current financial year. In the last financial year, Chandigarh, with an EV penetration of 13.5%, was ranked third nationally, behind Delhi (second) and Tripura (first) in terms of EV penetration during FY 2024-25.