In a bid to create a robust ecosystem for Electric Vehicles (EV) in Karnataka, the State government has unveiled a revised draft EV policy (2023-28). With this, it aims to attract ₹50,000 crore investment while potentially creating jobs for one lakh people. 

Karnataka’s present EV policy is about to expire. The State was the first in India to launch the EV policy in 2017 and further strengthened the incentives in 2021. The government plans to develop model EV cities across the state to promote EV adoption. These model cities would be developed in Kalaburagi, Belagavi, Hubballi-Dharwad, and Mysuru among others. 

It is also in discussion with the National Highway Authority of India (NHAI) to set up electric vehicle charging stations on either side of the highway at ten major toll booths along the national highway between Bengaluru and Pune.

“This proposed policy aims to transform Karnataka into a pioneering force in the field of electric mobility, embracing sustainable practices and equitable growth while fostering innovation and creating a robust ecosystem for EVs throughout the State,” M.B. Patil, Minister for large and medium industries and infrastructure development said.

The draft policy has highlighted that the government has identified Gauribidanur (Chikkaballapur) and Chikkamalligewada (Dharwad) as potential locations to create large EV clusters at the right price point. The land in both locations has been acquired and is readily available for investors, said Gunjan Krishna, Commissioner, Department of Commerce and Industries, Government of Karnataka. 

The proposed revised draft policy has increased capital subsidy for testing centres to 30 per cent for onboarding private operators for setting up EV Testing and Certification facility. The existing policy provides 15 per cent capital subsidy cap and one percent Production Linked Incentives for five years.

Further, the proposed draft policy has increased the coverage to provide incentives to include cell components like anode, cathode, separators, strong hybrid vehicles, battery recycling facilities, and testing infrastructure. These clusters would have six major components ready-to-occupy land parcels, ready-built factories/sheds, plug-and-play incubation facilities, testing labs, proving grounds, and homologation facilities.

In addition, the Government of Karnataka has offered capital subsidies for micro and small enterprises to be in the range of 25-30 per cent and 20-25 per cent, respectively. For medium-sized enterprises, incentives on the value of fixed assets (VFA) range from 20-25 per cent.

The draft proposes a rental subsidy to reimburse 30 per cent of rent or maximum ₹5 per sq ft per month, for three years on rental properties above 10,000 sq ft.Meanwhile, the existing stamp duty exemption remains as per the ongoing policy. 

To accelerate EV adoption, the proposed revised draft policy would rapidly identify land parcels aligned with power infrastructure for charging stations, providing favorable power tariffs.

With approximately 2.5 lakh, EVs registered and 700 charging stations in Karnataka, the state stands as the third highest in EV registrations nationally, with an 8 per cent adoption rate, showcasing the state’s commitment to reshaping the mobility landscape.

For skill development, which is a strong requirement for the EV industry to evolve, the Industrial Training Institute (ITI) will play a key role and not just help reduce skill development costs by 40 per cent but will also bring down training tenure by 2-4 months.