Goa Discontinues State Electric Vehicle Subsidy

Becomes the first State to end subsidy for EVs, current scheme to run till July 31

The Department of New & Renewable Energy, Government of Goa, has announced the State subsidy for electric vehicles (EVs), including electric bikes and e-scooters, along with electric three- and four-wheelers will be discontinued with effect from July 31. As a result, Goa has become the first State in the country to discontinue subsidies for EVs. 

Since the Indian EV space lacked awareness and since the offerings weren’t as affordable either, the Union government, in a bid to help accelerate the switch to EVs, has been taking steps like rolling out various subsidies and incentives to both EV manufacturers and buyers.

In addition to the incentives offered by the Centre like FAME II, a few States too offer further concessions to help reduce the effective price of an EV. For example, the ex-showroom price of the Ather 450X Gen 3 in New Delhi without any subsidies is Rs 2,13,005. However, the FAME II subsidy (given based on the battery pack’s capacity) is Rs 55,500, while the State subsidy is Rs 18,500, thus bringing the effective ex-showroom price of the 450X Gen 3 to Rs 1,39,005.

The Goa State EV subsidy was capped at Rs 10,000/kWh in FY 2021-2022, and reduced to Rs 8,000/kWh in FY 2022-2023 for electric two-wheelers. This subsidy was further capped at a maximum of Rs 30,000, and only 3,000 electric two-wheelers were eligible to avail of this subsidy per month. However, this scheme is now being scrapped after the next five days.

The main source of income for Goan residents is from the tourism sector, and there are a lot of two-wheelers rented out to tourists. Electric two-wheeler rentals are not a viable option in the State given its poor charging infrastructure. In addition, tourists would prefer renting ICE powered two-wheelers, as petrol is comparatively more affordable in Goa, and the convenience of ‘fill-shut-forget’ bodes well for tourists.

Two-wheeler rental agencies too prefer having ICE bikes and scooters in their fleet, as road tax in Goa is also comparatively less, which is more financially viable. Also Goan cities are comparatively much smaller in size compared to other metro cities, which results in higher average commute distances for residents.

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State governments also require to set aside a budget for EV subsidies, which might not be financially feasible in the long run. All these factors might have contributed to the Goan government changing its stance on the EV subsidy scheme, thus probably leading to its discontinuation. The FAME II subsidy continues to remain in effect in Goa. That being said, expect other States to soon follow Goa’s footsteps, as electric vehicles are gaining in popularity across the country.