Andhra Pradesh govt to buy 1 lakh electric two-wheelers for staff

New Delhi: The Andhra Pradesh government will help its employees buy more than 100,000 electric two-wheelers by arranging for domestic as well as global financing at attractive rates.

Touted by the state government as a world first, buying electric two-wheelers in such large quantities will translate to Rs 500-Rs 1,000 crore worth sales for manufacturers.

India’s electric two-wheelers market stood at 152,000 units – in volume terms - during the previous fiscal year and is estimated to grow at a compounded annual growth rate of 25% till March 2026.

The move comes soon after the state bought thousands of four-wheelers and trucks for use as ambulances, public distribution system vehicles and garbage pick-up trucks in recent months.

Andhra, which has around 400,000-500,000 staff working as volunteers in village secretariats, has prepared a plan wherein the original equipment manufacturers (OEMs) and financial institutions will offer loans at cheaper interest rates, enabling government staff buy electric two-wheelers.

Apart from teaming up with the central government-owned Energy Efficiency Services Ltd (EESL) that facilitates energy efficiency initiatives, the state government has invited bids from the OEMs to offer electric two-wheelers under attractive equated monthly instalments.

It is also in talks with global agencies like KfW and GIZ.

The New and Renewable Energy Development Corporation of Andhra Pradesh, the nodal agency for promoting renewable energy and electric mobility, has sought expressions of interest from prospective electric vehicle suppliers, said S. Ramana Reddy, vice chairman and managing director of the corporation.

Key EV makers such as Hero MotoCorp, Kinetic, Ampere and Okinawa are among those that have evinced interest so far and the government expects to receive bids before the April 10 deadline.

The policy objective is to phase out internal combustion engine (ICE) vehicles by 2024, said Reddy.

“As a part of the promotion of E-Mobility, and to meet the policy objectives, a scheme is formulated to promote one-lakh electric two-wheelers to all the government employees over a period of one year where the numbers will be increased based on the demand going forward,” he told ET.

Providing financial assistance can help bridge the financial gap between consumer affordability and the current product cost, said Vinay Raghunath, Partner and Leader, Automotive sector, EY India.

“This move will help create momentum for EVs and also help build an entire EV value chain in Tier 1 and Tier-II cities. Moreover, this will also give EV 2 wheelers a chance to engage with a larger set of users and showcase benefits to the end consumer,” Raghunath said.

Reddy said EESL and thermal energy producer NTPC have shown interest in extending financial support for the staff to buy the electric two-wheelers.

The state government prefers the OEMs and suppliers to meet the distribution and after-sales service needs in over 650 mandals and over 100 municipalities spread across 13 districts.

The state currently has around 13 million vehicles, of which around 9 million are two-wheelers.

ET Bureau