TN unveils new electric-vehicle policy; targets ₹50,000-cr investment

G Balachandar Chennai | Updated on September 16, 2019 Published on September 16, 2019

Tamil Nadu Chief Minister Edappadi K Palaniswami

Sops galore for both manufacturers and buyers; industry hails policy; says State

Tamil Nadu Chief Minister Edappadi K Palaniswami on Monday unveiled the State’s electric-vehicle policy, which has set out a vision to attract ₹50,000 crore in investments and create 1.5 lakh new jobs.

While the ‘Tamil Nadu Electric Vehicle Policy 2019’ aims to create a comprehensive EV ecosystem in the State, it has also chalked out a strategy to make Tamil Nadu the preferred destination for EVs and component manufacturing units, including battery and charging infrastructure. The support measures announced in the EV policy include 100 per cent road tax exemption for all types of EVs, capital subsidies, reimbursement of State GST, subsidy on land cost and special incentives for job-creating EV projects.

Capitalising on its traditional strengths in manufacturing and skill availability and thanks to the support measures under the new policy, the State will emerge as a leader in the EV space, industry representatives say.

Under the new EV policy, the major cost saving as part of the on-road price package will be on insurance, as the State government offers 100 per cent road tax exemption and there will be waivers on registration fees under the Central government’s policy.

A plethora of measures

For makers of EVs, parts and charging infrastructure equipment makers, there is a plethora of support measures.

“Our EV policy is a comprehensive one as it covers the manufacture of electric vehicles, batteries and accessories. Apart from capital subsidy and tax exemption, we have given land subsidy. Also, we have decided to create an EV park with plug-and-play facilities. This is also a unique feature when compared with other States,” N Muruganandam, Principal Secretary to Government, Industries Department, Government of Tamil Nadu, told BusinessLine.

Holistic approach

“It’s a well-thought-out policy for a manufacturing State like Tamil Nadu. Interestingly, the State government had wider consultations with industry people at every stage to come out with such a comprehensive policy. The new policy will give a much-needed push to EV adoption. Also, the State can emerge as a strong force in EV manufacturing given its strengths,” BC Dutta, Vice-President – Corporate Affairs, Hyundai Motor India, told BusinessLine.  Under the new policy, all electric vehicles — two- and three-wheelers, cars, buses and commercial vehicles — will get 100 per cent road tax exemption till the end of 2022, according to a statement.

The new EV policy has also offered to provide incentives under a special package for investments above ₹50 crore and create at least 50 direct jobs in the form of new projects or expansion projects. Investments made from April 1, 2018 will be considered for this.

“Since the EV industry is evolving, the State government’s threshold level of ₹50 crore for incentives is a welcome move. This can attract electric two-wheeler companies such as Ather Energy to invest in the State,” said an industry analyst. 

Elaborating on the unique features in the policy, Muruganandam said that the State government will set up exclusive EV parks in major auto-manufacturing hubs and also in areas that have the potential to attract EV investments. These EV parks will enable the creation of a vendor ecosystem that will serve OEMs.

The State government has attempted to put southern districts also on the investment map. The new electric policy offers to provide investors a 50 per cent subsidy on the land cost if the investment is made to obtain land from government agencies in southern districts, while in other districts it is just 15 per cent.

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Published on September 16, 2019
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