Electric Vehicle Policy Clash: Centre and Arvind Kejriwal govt lock horns, Here's what you need to know

Electric Vehicle Policy Clash: A showdown has emerged between PM Modi-led BJP government at the Centre and Arvind Kejriwal's AAP in Delhi over the electric vehicle (EV) policy. While the Central Government has greenlit the new Electric Mobility Promotion Scheme 2024 (EMP Scheme 2024) to boost the production and adoption of electric vehicles nationwide, the Delhi government under Arvind Kejriwal has opted to extend the existing EV policy in the capital until June or until the introduction of Delhi EV Policy 2.0. This clash comes as the Central Government introduces the EMP Scheme 2024 before the expiration of the current FAME-2 Scheme, which is set to conclude on March 31, 2024.

Delhi Extends Old EV Policy

Reports indicate that the Cabinet of Chief Minister Arvind Kejriwal's government has approved the extension of Delhi's EV policy until June 2024. According to a statement released by the Delhi government, all existing incentives and subsidies from the old EV policy will remain in effect in the national capital. The extension benefits any electric vehicle purchased after January 1, 2021. The extension will be effective until June 30, 2024, or until the announcement of Delhi EV Policy 2.0, as decided during Friday's cabinet meeting.

Centre Approves New EV Policy

In contrast, the Central Government has given the green light to the new Electric Vehicle Policy (EMP Scheme 2024) on Friday. The policy aims to stimulate the manufacturing, sales, purchases, and foreign investments in electric vehicles across India. Foreign companies investing a minimum of $500 million (approximately Rs 4,150 crore) will receive exemptions from the government to establish production plants in India.

EV Policy to Attract Tesla

An official statement from the Commerce and Industry Minister highlighted that the EV policy seeks to position India as an electric vehicle manufacturing hub and attract investments from global giants like Tesla. Under this policy, companies establishing electric vehicle production plants can import a limited number of cars at reduced customs duty. To qualify for this exemption, the company must invest a minimum of $50 million (approximately Rs 4,150 crore), with no maximum limit imposed.

Conditional Exemption for Foreign Companies

The ministry's statement outlined that the duty concession on imported electric vehicles would be limited to the investment amount of the company or the incentive amount of Rs 6,484 crore under the PLI scheme, whichever is lower. If the investment exceeds $800 million, a maximum of 40,000 electric vehicles can be imported annually at a rate of 8,000 per year.