Telangana announces EV and energy storage policy

by Nilesh Wadhwa 30 Oct 2020


The southern India state of Telangana is the latest to come out with a comprehensive policy directed at the e-mobility industry and eco-system. Earlier today, the state government ​announced its ‘Electric Vehicle & Energy Storage Policy 2020-2030’, which aims to make the region a preferred destination for EV manufacturing and a leader in the adoption of green vehicles.

The state has announced several steps, that it believes will help make the state an EV manufacturing and adoption hub. The EV policy makes incentives available for manufacturing of electric vehicles, energy storage systems and related components in Telangana.

The government will provide incentives that includes capital subsidies, SGST (state GST) reimbursements, power tariff subsidies, etc. Incentives shall be made available for two-, three-, four-wheelers, LCVs, shared transport and public transport. Furthermore, waiver on road tax and registration charges, incentives for charging infrastructure will also be given. The policy also encourages ride-hailing services to operate electric vehicles through incentivisation. Battery operated feeder shuttle services at all Hyderabad Metro stations for last-mile connectivity is also announced.

The state government will further promote the adoption of EVs at the institutional level starting at government entities. While a preferential procurement to ‘Make in Telangana Electric Vehicles and Energy Storage Systems’ for government orders shall be provided.

Kalvakuntla Taraka Rama Rao, Minister for IT E&C, MA&UD and Industries & Commerce Departments, Telangana said: “With the advent of clean technology and high-density energy storage solutions, a shift to cleaner transportation is inevitable and electric vehicles are no doubt the future of mobility. The state of Telangana, being a pioneer in adopting sustainability, aims to spearhead the EV revolution in the country. As the state drives the faster adoption of electric vehicles, it aspires to be not just self-sufficient, but also a global hub for electric vehicles and energy storage systems manufacturing. It is our vision to become the most electrified state in the country.”

Purchase incentives
Road tax and registration fee exemption for the first 200,000 electric 2-wheelers, 20,000 electric 3-wheelers and 5,000 four-wheeler for commercial use (cabs, taxi, tourist cabs) purchased and registered within Telangana. Retrofitment incentive at 15 percent of the retrofitment cost upto Rs 15,000 per vehicle for first 5,000 three-wheeler autorickshaws.

Exemption of road tax and registration fee for first 10,000 e-3W (goods), e-carriers as well as electric light goods carriers. For the first 5,000 electric cars registered by private users exemption of road tax and registration fee. Road tax and registration fee exemption for first 500 electric-buses. State Transport Units will be encouraged to purchase electric buses. The government has also waived of road tax and registration fee for electric tractors.

Charging infrastructure
In terms of providing the necessary support to the EV ecosystem the Telangana government has said that it shall facilitate setting of up initial batch of fast charging stations in Hyderabad and other towns in a phased manner, by state entities and private players. The state will provide special power tariff category for EV charging stations. TSREDCO (the state nodal agency) will evaluate to establish public charging stations directly or under licensee/franchise/PPP model at public places such as airports, railway/ metro stations, parking lots, bus depots, markets, petrol stations, malls and electric poles shall be examined for the same.

The policy will also help towards creating a viable business model for private players to set up ARAI compliant EV charging/swapping infrastructure. TREDCO will coordinate with state DISCOMS to ensure supply of renewable energy for EV charging stations and set up solar rooftop plants as per net metering policy and captive power plants shall be encouraged as per the TSREC Guidelines.

Manufacturing incentive
The Telangana government says it will incentivise EV and ESS sectors as per the subsidies and incentives available under the Electronics Policy 2016. The government will extend tailor-made benefits to Mega and Strategic Projects on case to case basis. Investment of more than Rs 200 crore in plant and machinery or providing employment to more than 1,000 persons will be categorised as mega project.

The announced incentives for manufacturers include –

  • Capital investment subsidy - 20% of investment capped at Rs 30 crore for mega enterprises.
  • SGST Reimbursement - 100% net SGST reimbursement capped at Rs 5 crore per year with a cumulative cap of Rs 25 crore over a period of 7 years for mega enterprises.
  • Power tariff discount of 25% for 5 years capped at Rs 5 crore for mega enterprises.
  • Electricity duty exemption of 100% for 5 years capped at Rs 50 lakh.
  • Interest Subvention at 5.25% for 5 years capped at Rs 5 crore.
  • Transportation subsidy at 60% with 10% reduction YoY - for 5 years; capped at Rs 5 crore.
  • Stamp Duty/ Transfer Duty/ Registration Fees Reimbursements: 100% on first, 50% on second transaction.
  • The state will also provide lease rental assistance, assistance in patent filing, reimbursement of quality, certification costs, cleaner production cost reimbursement, exhibition cost reimbursements, skill development assistance. 
  • Telangana has identified Electronics Manufacturing Clusters (EMC) and Industrial Parks for promotion of EV and energy storage manufacturing companies. Currently EMCs exist at Raviryal and Maheshwaram, a designated industrial park at Divitapally for Energy Storage manufacturing, with additional parks are being designated.
  • The state will encourage manufacturing and assembly of EV related batteries and cells through electronics manufacturing policy and incentives.
  • It shall promote reuse of EV batteries in stationary energy storage applications. The state will enable collaborating between cell/ battery manufacturers, EV manufacturers, energy storage operators and recyclers to ensure efficient reuse and recycling of batteries.
  • Urban mining of rare materials and cell/ battery recycling shall be incentivised on par with EV and ancillary manufacturing.
  • Residential Townships with over 1,000 families are encouraged to develop charging stations lots.
  • The state envisions have a charging/ swapping station for every 50km within state boundaries on highway to cities like Bangalore, Mumbai, and Chennai, followed by other national/state highways.
  • HMR stations and TSRTC Bus depots (across the state) shall provide reserved parking and charging points for two-wheelers in their parking zones to encourage EVs for last-mile commute.
  • The government shall develop night-time community parking with charging facility in PPP mode for e-autos, shared mobility taxis and public transport vehicles within industrial zones.
  • A battery disposal infrastructure model shall be created to facilitate deployment of used EV batteries. 

Developing EV and ESS cluster

The Telangana EV Policy has also announced development of mega EV and ESS manufacturing cluster with global standard infrastructure. The EV cluster shall have common facilities as given below –

  • Support infrastructure like roads, power, and water shall be provided at doorstep of the industry
  • Built-Up space with ready factory sheds shall be developed to be used mainly by MSME units
  • A common facility for design, prototyping, and testing available to all units in the cluster
  • Common infrastructure such as drainage/ common effluent treatment plant (CETP)/sewage
  • treatment plant (STP) and utilities such as power, gas and water
  • A state-of-art business environment with facilities such as Convention and exhibition centres
  • Shared facilities to meet staffing and training requirements
  • A logistics hub to provide with multimodal transport for safe and efficient handling of cargo

Promoting R&D in Telangana
A dedicated facility shall be developed to house EV R&D centres by domestic and global EV Majors. The state government will utilise Hyderabad’s strength in technology domain shall to provide quality manpower for such centres. This hub is also expected to attract global R&D activities on other emerging mobility trends such as connected and autonomous vehicles.

The state government will also partner with premier Technical Institutes and research establishments across the state to establishing Centres of Excellence for conducting market-focused research on battery technologies, battery management, motors, and controllers. It will also seek industry participation and leverage the government of India EV policy to provide grant to these centres. The government says NFTDC (Non-Ferrous technologies Development center) at Hyderabad is running one such COE on electric vehicle technologies, under the government of India FAME scheme.

T- Fund - the government shall offer financial support to start-ups for research and innovation in EV and battery technologies. Yearly awards shall be instituted to recognise breakthrough work in battery technologies in separate categories for OEM’s, ancillaries and start-ups

T-Works Automotive Prototyping Center – recognised as India’s largest prototyping centre,  T- WORKS shall have a dedicated wing for prototyping of EV components/ assembly and battery. Industry partnership in the same shall be invited from EV OEMs and large component manufacturers. The facility shall serve start-ups and MSME units in the EV space at subsidised rates.

Sohinder Gill, director general, SMEV welcomed the announcement and said, "We welcome the announcement of EV policy by Telangana government. While the policy offers non-fiscal incentives such as encouraging ride-hailing services, institutional adoption and government buying, extends support for the creation of charging infrastructure and setting up of manufacturing units but, it misses offering direct incentives to customers, which are much required to motivate the citizens to adopt environmentally-friendly vehicles. We believe that bringing volumes should be the priority of the policy that would automatically augment the market. We hope that the government would look into it and come up with a direct subsidy scheme, which will help in demand creation."