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Electric vehicles are vehicles that run on electric batteries instead of petrol or diesel. Electric cars are a healthy alternative for petrol and diesel cars if you are looking for something that is environmentally friendly and more efficient. With the high price of petrol, electric vehicles are gradually gaining awareness. There is a lack of awareness about electric cars in the market. People still prefer petrol and diesel cars over electric cars. They not only provide electric batteries as alternatives but are better than the usual cars when it comes to performance. The government is also providing incentives on the insurance of electric cars.  

Electric Vehicles Subsidy

In order to raise awareness and increase the sale of electric vehicles, the government is providing subsidies on electric vehicles. The central government took the initiative and raised the financial incentive from Rs 10000 to Rs 15000/kWh for electric two-wheelers. They have also incentivized the insurance of electric vehicles.

States such as Maharashtra, Delhi and Gujarat are now offering subsidies in addition to the Rs 15000/kWh subsidy available under the union government’s Faster Adoption and Manufacturing of Electric Vehicles scheme.

States Offering the Most Subsidies for Electric Car Buyers


Maharashtra has come up with the easiest and friendly offer on electric vehicles for both manufacturers and consumers. If you are buying an electric vehicle you should opt for Maharashtra. That’s because it’s easier and cheaper to buy electric vehicles in Maharashtra as compared to any other state. The government wants an increase in the sale of electric vehicles. Incentives are being provided by the state to the buyers by providing an incentive of Rs 5000/kWh for all vehicle categories.

They are also giving an early bird discount of Rs 5000/kWh along with the incentive. For two-wheelers, the subsidy is Rs. 10,000. For three-wheelers, the subsidy is Rs 30,000 and for four-wheelers, the subsidy is Rs. 150,000. Subsidy of Rs. 20 Lakhs is provided for an electric bus. If you are planning to buy a 3 kWh battery pack then you get a subsidy worth Rs. 10,000. There’s also an early bird discount for those who will buy an electric vehicle before December 31 of this year. In addition to that, in Maharashtra, you may likely get a 5-year warranty on the vehicle. In Maharashtra, in the coming year, the government is planning to set up 2,400 charging stations in 7 cities.


Gujarat is offering the highest amount of subsidy to those who are buying an electric vehicle. The state of Gujarat is offering Rs 10000/kWh. For those who are looking to buy a two-wheeler the state is offering a subsidy of Rs.20,000 and those who are buying a three-wheeler, they can get a subsidy of Rs. 50,000. If you are planning to buy a four-wheeler you can get a subsidy of Rs. 1.5 Lakhs. In addition to that, your registration charges will also be waived off. The state has not waived off the road tax which comes down to 6 percent of the vehicle cost. But the Gujarat government offers a maximum subsidy of Rs. 10 Lakhs whereas the Maharashtra government offers a subsidy of Rs. 5 Lakhs. The government of Gujarat is planning to set up 528 charging stations in Gujarat, in the coming years.


The government of Delhi has planned the most comprehensive plan for the Electric Vehicle policy. In August 2020, the Delhi government has planned a three-year road map. On electric vehicles, the government is offering a subsidy of Rs. 5000/kWh subsidy with the maximum subsidy reaching Rs. 30,000. AT present all the electric vehicles are offering a battery capacity of 2-3 kWh which means you can get a subsidy worth Rs. 15,000. If you are purchasing an electric three-wheeler you can get a subsidy of Rs. 30,000 and if you are planning to buy a four-wheeler you can get a subsidy of Rs. 1.5 Lakhs. Similar to the policy laid down by the Maharashtra government the Delhi government also offers incentives on scrapping, ranging from Rs 5000-7000. The Delhi government has also waived road taxes and registration charges for electric vehicles just like Maharashtra.

Wrapping it Up!

Electric vehicles are eco friendly and more efficient than normal petrol and diesel cars. With the rising rates of petrol and diesel, they are more pocket friendly. In order to increase the awareness of these vehicles, the government has taken the initiative of offering subsidies and waiving taxes. However, these policies are available in a few states of India. For more related to electric car insurance, check out the details on Finserv MARKETS.

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FAQs on Electric Car Subsidy

  • ✔️Is buying electric cars worth the money?

    You can save money on petrol and diesel by going for electric cars. Not only that, you also save on the interest on your car loan for electric cars since you can claim deductions for it under Section 80 EEB.

  • ✔️How much can I save on taxes under Section 80EEB?

    If you take a car loan for an electric car then you can claim up to Rs. 1.5 lakhs as tax benefit on the interest that you have to pay for that loan.

  • ✔️Why is the government offering subsidies and benefits on electric cars?

    The simple answer is that it is needed to make it more interesting for people to buy electric cars. They offer some really good benefits over regular petrol and diesel cars. Chief among which is the 0 emissions benefit. Which leads to a cleaner environment.

  • ✔️After buying the electric vehicle, when will I get the incentives?

    You’ll get the incentive at the time you buy the vehicle.

  • ✔️Is there no subsidy available in all the states in India?

    Different states in India are already working on drafting bills on subsidies they intend to offer. In time you may be able to find a subsidy on electric cars in almost every state in India.

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