Tamil Nadu drafts policy to be India’s ‘EV hub’, aims to attract Rs 50,000 crore investment

by Sumantra B Barooah 16 Sep 2019


The chief minister of Tamil Nadu, E Palaniswami; senior bureaucrats and industry representative unveiling the draft EV policy today.

Tamil Nadu (TN), a major automotive manufacturing hub also known as the 'Detroit of the East', now wants to also become the 'EV hub of India'. The state with the second largest vehicle population in the country has finalised its policy to promote electric mobility in the state. The TN government aims to build a comprehensive EV ecosystem for which it hopes to attract a cumulative investment of Rs 50,000 crore. Around 150,000 new jobs are expected to be created in the new ecosystem. The policy, released today, will come into effect from the date of the government order with a validity of 'ten years or till a new policy is announced'.

The broad objectives of the EV policy are:
- Create robust infrastructure for electric vehicles including adequate power supply and network of charging points with favourable power tariff.
- Promote EV innovation for automotive and shared mobility by providing the ecosystem and infrastructure to make Tamil Nadu, the EV hub of India.
- Create a pool of skilled workforce for the EV industry through the technical institutions available in the State and create new jobs in the EV industry.
- Make Tamil Nadu the preferred destination for EVs and component manufacturing units including battery and charging infrastructure.
- Create a conducive environment for industry and research institutions to focus on cutting edge research in EV technologies and reap the benefit from the outcome.
- Recycle and reuse used batteries and dispose the rejected batteries in an environment friendly manner to avoid pollution.

Some of the key incentives under TN's EV Policy to facilitate in building a mass scale EV market are:

Incentives for purchase of electric two-wheelers
100 percent road tax exemption will be provided till 30th December, 2022.
- Waiver on registration charges/fees will be done as per Government of India's notification.

Incentives for three-seater auto-rickshaws
An open permit system will apply to approved e-auto permits to be issued. The list of approved e-autos will be notified by the Department of Transport. The following further incentives will be offered:
- Auto Rickshaw permit fees will be waived for e-autos till 30th December, 2022.
- 100 percent road tax exemption for e-autos till 30th December, 2022.
- Waiver on registration charges/fees will be done as per Government of India's notification.

Incentives for transport vehicles such as taxi, tourist cars
Taxi permit fees will be waived for electric transport vehicles till 30th December, 2022.
- 100 percent road tax exemption for all electric transport vehicles till 30the December, 2022.
- Waiver on registration charges/ fees will be done as per government of India's notification.
- STUs will be provided with subsidy to enable purchase of EV buses.

Incentives for LCVs (including three-wheelers)
There will be no requirement of permit for the three-wheeler goods, e-carriers as well as electric light goods carriers.
- 100 percent road tax exemption for all e-carriers registered till 30th December, 2022.
- Waiver on registration charges/fees will be done as per Government of India's notification.

Incentives for private cars
Road tax exemption will be enhanced from 50 percent to 100 percent till 30th December, 2022.
- Private car owners shall be encouraged to switch over to electric cars.
- Waiver on registration charges/fees will be done as per Government of India's notification.

Incentives and support for charging stations
Adequate policy support will be provided for the development of charging infrastructure in cities and other places.
- The State will invest in setting up charging stations, with the active participation of public sector units including TANGEDCO and private players.
- The government will develop schemes with appropriate capital subsidy to enable private operators to set up public charging stations.
- Provision for charging stations will be made in commercial buildings such as hotels, shopping malls, cinema halls, apartments, etc.
- The government will take effort to set up 3*3 Grid charging stations in Chennai, Coimbatore, Trichy, Madurai, Salem and Tirunelveli.
- One charging station will be set up at 25 km intervals on both sides of NHAI and State Highways.
- TANGEDCO will invest in setting up both slow and fast charging networks in government buildings and other public places. 
- TANGEDCO will setup the charging infrastructure on its own or through private operators using appropriate public private partnership models.
- Charging points will be provided in the government office parking lots in Chennai, Coimbatore, Madurai, Trichy, Salem, Tirunelveli and other places based on the requirements.

Tamil Nadu has a population of nearly 2.8 crore vehicles with internal combustion engines. The state also has the highest rate of urbanisation in the country with almost half its population living in urban areas.  The state didn't see much EV adoption at the end of FAME I which ended on March 31, 2019. Under Vision 2023, the TN government envisages the state to be 'the most prosperous and progressive' state where its people enjoy all the basic services of a modern society and 'live in harmonious engagement with the environment'. The policy document states that the EV policy is in line with the regime's stated objective.

Tamil Nadu chief minister visits Tesla's Fremont facility

On September 6, Tamil Nadu chief minister Edappadi K Palaniswami visited the Tesla Factory at Fremont, USA. (AIADMK/Twitter).

Now, it looks like the state is looking to aggressively drive its electric vehicle and electric mobility programme. Interestingly, on September 6, Tamil Nadu chief minister visited Tesla's manufacturing plant at Fremont, USA

INDUSTRY RESPONDS TO TAMIL NADU'S EV POLICY

Sohinder Singh Gill, Director General, SMEV: "We welcome the  announcement  of Tamil Nadu EV policy 2019 by the state government. It is indeed a great move by the state to encourage manufacturers to set up plants while motivating citizens to adopt a cleaner mode of transportation. The policy offers multiple non-fiscal support that would certainly help the industry to move forward. However, we anticipated some fiscal incentives that are the need of the hour to boost the sale of personal vehicles, which is currently minimal."

Mahesh Babu, CEO, Mahindra Electric: "We welcome the draft policy by Tamil Nadu which is both progressive and compehensive in nature. It outlines clear adoption strategies for last mile connectivity through three-wheelers and shared mobility by four-wheelers. We appreciate the demand side incentives provided by the government like road tax exemption, zero permit fees, registration charges waiver for three-wheelers. We are looking forward to the implementation of this draft policy soon. Mahindra is ready with products like the Treo for helping the state achieve its EV adoption goal."

Tarun Mehta, CEO and co-founder, Ather Energy: "Tamil Nadu's EV policy has taken into account the entire EV ecosystem and is extremely comprehensive. Removing the Road tax for end consumers will have a positive impact on the adoption rate of EVs in the state. And refunding the SGST (State GST) along with the plethora of other OEM focused incentives make the state an attractive hub for manufacturing. The state has taken a long term approach to building R&D and skilled labour by also considering adding EV design and build to the curriculum in the state's technical colleges. This creates a pipeline of talent for an industry that is currently managing with a dearth of talent that has hands on experience with EVs."

"The only aspect that will need more support is the charging infrastructure. As the policy mentions it is a critical part of the ecosystem and needs to be addressed. Fiscal support in the form of subsidies or investments in the sector would go a long way to make Tamil Nadu a hub for EVs," added Mehta.

Nagesh Basavanhalli, MD and CEO, Greaves Cotton: “We welcome The Tamil Nadu state government’s policy on electric vehicles and it is a great initiative. With this, we inch a step closer to the dream of pollution-free, affordable EV mobility in the last mile. While this accelerates the adoption of electric vehicles,  this will also open up a good avenue for the e-commerce and shared mobility segment.”