Madhya Pradesh plans subsidies for electric vehicles in EV Policy 2025

In a major push towards the adoption of electric vehicles, the Madhya Pradesh government has proposed subsidies on various EV categories in its EV Policy 2025. These range from Rs 5,000 to Rs 10 lakh for electric vehicles including cars, two-wheelers, three-wheelers, cycles and commercial vehicles.

The government has published the draft of this five-year policy and is open to suggestions. The state subsidies will be over and above the incentives provided by the central government. Currently, the Centre offers incentives for purchasing electric two-wheelers, three-wheelers, trucks, buses, and ambulances, through the recently launched PM E-Drive scheme. Passenger vehicles are excluded.

The Madhya Pradesh government will fund this initiative through multiple revenue streams, including “an air quality improvement/pollution cess of 10 paise per litre on diesel vehicles,” higher road taxes for luxury petrol and diesel vehicles valued above Rs 25 lakh, and fines and penalties on violating green zone regulations in the five designated EV model cities of Bhopal, Indore, Jabalpur, Gwalior, and Ujjain.

The government has set various targets for electric vehicles comprising 15% of all new registrations in the four-wheeler segment, 40% in two-wheelers (with 100% electrification in commercial fleets), 70% in three-wheelers (passenger and freight segments), 40% uptake for non-government and government electric buses, and 15% in the light commercial vehicles, by the time the policy expires in 2030.

Electric cars

Under the policy, electric car buyers will receive a maximum subsidy of Rs 50,000 per vehicle or up to Rs 2,500 per kWh based on battery capacity. This will be provided for up to 10,000 EVs with an ex-factory price of less than Rs 25 lakh. Other benefits include a 100% exemption from vehicle tax and registration fee, along with a one-year parking fee exemption. A retrofitting incentive of up to Rs 15,000 per vehicle is available for 2,000 vehicles.

Electric two-wheelers

A maximum incentive of Rs 10,000 per electric two-wheeler or Rs 5,000 per kWh based on battery capacity is available for up to 1 lakh units with an ex-factory price less than Rs 1.5 lakh. Regulatory benefits include a full exemption from vehicle tax and registration fee, a one-year parking fee exemption, and scrapping incentives of up to Rs 5,000 per vehicle for 1,00,000 vehicles. Retrofitting incentives of up to Rs 5,000 per vehicle are available for 2,000 vehicles.

Electric three-wheelers

Eligible buyers will receive a subsidy of Rs 20,000 per electric three-wheeler or Rs 5,000 per kWh based on battery capacity will be provided for up to 15,000 units with an ex-factory price less than Rs 5 lakh. Other benefits include a 100% exemption from vehicle tax and registration fee, reduced loan interest rates, and permit exemptions from the Transport Department. Buyers will also receive a one-year parking fee exemption, a scrapping incentive of up to Rs 7,500 per vehicle for 15,000 vehicles, and retrofitting incentives of up to Rs 10,000 per vehicle for 3,000 vehicles.

Electric buses

To encourage electrification in public transport and essential services, the state government will provide a capital subsidy of Rs 10,00,000 per unit for up to 100 electric buses each for non-government and government sectors. Buyers will receive a 100% exemption from vehicle tax and registration fee, along with a 5% interest subvention on loan interest rates. A retrofitting incentive of up to Rs 2,50,000 per vehicle is available for 100 vehicles each for both sectors.

Electric light commercial vehicles

A capital subsidy of Rs 50,000 per electric light commercial vehicle or up to Rs 5,000 per kWh based on battery capacity is available for up to 5,000 units. Additional benefits include a 100% exemption from vehicle tax and registration fee and a one-year parking fee exemption. There are no scrapping incentives, and retrofitting incentives do not apply to e-LCVs.

Electric cycles

For those who prefer pedalling their way through traffic with a little electric boost, the government is offering a capital subsidy of Rs 5,000 per e-cycle, with a cap of 30,000 vehicles with an ex-factory price of less than Rs 40,000. Free parking space is also provided for a year.