Chandigarh EV policy revised after uproar from dealers

Chandigarh has revised its ambitious EV policy that targeted 100% switch to electric mobility by 2027 after auto dealers and vehicle makers opposed the move fearing that more states and union territories could follow suit.

In 2022, the UT had announced putting a cap on the registration of non-EVs to encourage and accelerate the adoption of EVs. As per the original order, seven in every 10 two-wheelers and one in every five cars registered in Chandigarh must be an EV by 2024.

Targets were also set for other classes of vehicles such as three-wheelers, cargo vehicles and buses.

This order now stands revised mandating 25% penetration of both two and four-wheelers by 2024. However, the long-term target of achieving 100% switch to EVs by 2027 remains unchanged.

Though no order regarding mandatory switchover to EVs has been issued or contemplated by the central government, Chandigarh became the first UT/state to issue such an order to make itself a “Model EV City” by achieving one of the highest penetrations of zero-emission vehicles within the policy period of five years.

Chandigarh targets have been termed ambitious by market watchers because by the end of FY23, India achieved an EV penetration of just 1% in passenger vehicles (cars, utility vehicles and vans) while the penetration in two-wheelers stood at under 5% in the same year, as per data shared by Vahan.

As per the 2023 Economic Survey, India forecasts EV sales to hit 10 million by 2030 led by two-wheelers and three-wheelers. In 2022, total EV sales in India stood at 1 million units.

While Chandigarh administration provides maximum incentives of Rs 1.5 lakh on all electric cars irrespective of their price, there are presently only six electric car models priced under Rs 20 lakh.

In case of electric two-wheelers, the incentives offered by the UT is independent of their empanelment with the FAME -2 (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles) scheme, but subject to condition availability of ARAI (Automotive Research Association of India) certification.

The UT will provide incentives to only 3,000 electric cars for the first 2,000 vehicles in addition to a maximum incentive of Rs 30,000 to be provided for the first 10,000 electric two-wheelers during the policy period.

Manish Raj Singhania, president of the Federation of Automobile Dealers Association (FADA), said, “How can you stop a customer from buying the two-wheeler from an adjoining state and riding it in Chandigarh? It is the UT of Chandigarh who will lose money. The customer will get the vehicle from anywhere, especially now that we have BH number plates.”

Singhania added that FADA has approached the high court against the Chandigarh administration order claiming that it is against the Central Motor Vehicle Rules, 1989.

The UT has relaxed its rule regarding point of sale of vehicles, allowing buyers to become eligible for availing the incentives if the e-vehicle is bought from outside of Chandigarh.

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