The Uttar Pradesh (UP) government’s new policy providing for no registration cost on strong hybrid vehicles is very clear that the only reference it has taken from Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme is on efficiency and performance which companies have matched.
Sources said senior officials from the UP government and representatives from companies such as Bajaj Auto, Mahindra & Mahindra (M&M), Maruti Suzuki India (MSIL), Tata Motors, and Toyota Kirloskar Motor (TKM) met on Monday to clarify confusion about the policy.
“The UP government has asked them to give all the inputs in writing within the next few days. According to the UP government’s policy, any four-wheeler, either electric or strong hybrid, will get ₹1 lakh or 15 per cent of the ex-factory cost as the subsidy (to the customers) and the State has a total outlay of ₹250 crore and maximum number of vehicles approved is 25,000 units,” a source privy to the meeting told businessline.
Sources also added that there is no price bracket on the cost of strong hybrid vehicles right now, so even luxury electric cars around ₹1 crore will benefit from the UP’s policy.
FAME-II guidelines
“If they (UP) follow the FAME-II guidelines in entirety then they will be violating the new policy because in FAME-II only commercial vehicles (taxis) were allowed and not private cars. The new policy is different from the FAME-II policy,” an official clarified.
On July 5, the UP government announced a complete waiver of registration tax on strong hybrid cars. Thismove is likely to benefit companies like MSIL, Honda Cars India, and TKM as a first-mover advantage.
UP automobile market
According to Federation of Automobile Dealers Associations, UP is one of the largest markets for passenger vehicles in the country after Maharasthra, with retail sales of 2,36,097 units in the first half (H1) of this year — a jump of 13.46 per cent compared with 2,08,092 units in January-June 2023.
The UP government had announced the policy in 2022, which has now been implemented. In March 2023, the State announced a policy of zero registration cost for electric vehicles (EVs), including two/ three-wheelers, e-buses, and e-goods carriers.
Meanwhile, some of the industry veterans said that incentives should be given only to strong plug-in hybrids, which can also run as independent battery electric vehicles, and not on those vehicles in which battery is used only for improving fuel efficiency.