The rush for private electric four-wheelers (E4W) in Telangana after the government’s tax SOPs under its EV policy 2020-2030 has now hit an unexpected speed bump in the state.
While private passenger E4W sales had revved up after the state government rolled out GO MS No 11 & 12 in February 2021 providing 100% exemption on road tax and registration, the speed in lapping it up has resulted in the quota for E4Ws being emptied early this year. In other words, private E4W buyers have to now pay the same road tax and registration charges as conventional internal combustion engine (ICE) based on pricing and other parameters, slamming the brakes on E4W sales.
Initially, only 5,000 private E4Ws were eligible for tax breaks but this quota got exhausted in March. It was extended by another 2,000 and then 1,000 by offering part of quota under taxi E4Ws and electric two wheelers (E2Ws).
“Sometime in June-July the enhanced quota also ran out. Beyond 8,000 it was difficult to continue this exercise. A call has to be taken and discussions are on to decide whether to remove it for some segments or extend it up to a particular year or volume,” an official explained.
‘Telangana is frontrunner in India in adoption of E4Ws’
The move has hit hard major E4W players such as Tata Motors, whose Nexon EV is one of the fastest selling E4W, and others including MG Motors and Mercedes-Benz. “Telangana was the lead runner in India in EV adoption but this has come as a bit of a shocker. Many who booked EVs are now thinking of ICE vehicles or putting their decision on hold,” said Santosh Iyer, MD & CEO, Mercedes-Benz India.
Gaurav Gupta, deputy MD, MG Motors India, also said the pause in EV policy in the past six weeks has impacted sales in Telangana, hitherto considered a promising state for EVs.
Industry sources said this could also disrupt Telangana’s ambition to emerge as India’s most electrified state given that this category was seeing the fastest adoption.The private E4Ws had been clocking the fastest growth in terms of registrations, Road Transport Authority (RTA) officials told TOI. Car manufacturers now have their fingers crossed.
“SOPs were a booster to faster adoption and Telangana was in the right direction. Perhaps the government did not expect such a big response and it’s causing revenue loss. But we would request the state to at least continue the incentives for a couple of years or provide 50% tax difference with ICE vehicles so that we can have cleaner cars driving in cleaner cities,” Iyer said.
Gupta added: “About 30% of our sales are from EVs here. In terms of acceptability of technology and future design, Hyderabad and Telangana are far ahead.”
