Tamil Nadu, a major automotive manufacturing hub that is also known as the 'Detroit of the East', now wants to also become the 'EV hub of India'. The state, which has the second-largest vehicle population in the country, has finalised its policy to promote electric mobility and aims to build a comprehensive EV ecosystem, for which it hopes to attract a cumulative investment of Rs. 50,000 crore. Around 1,50,000 new jobs are expected to be created in this new ecosystem. The policy will come into effect from the date of the government order, with a validity of '10 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.
- 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 Tamil Nadu's EV Policy to facilitate building a mass-scale EV market are:
Incentives for purchase of electric two-wheelers
- 100 percent road tax exemption will be provided till December 30, 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 approve e-auto permits to be issued. The list of approved e-autos will be notified by the Department of Transport. Further incentives to be offered as follows:
- Auto Rickshaw permit fees will be waived for e-autos till December 30, 2022.
- 100 percent road tax exemption for e-autos till December 30, 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, etc.
- Taxi permit fees will be waived for electric transport vehicles till December 30, 2022.
- 100 percent road tax exemption for all electric transport vehicles till December 30, 2022.
- Waiver on registration charges/ fees will be done as per government of India's notification.
- State Transport Units (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 three-wheeler goods and e-carriers, as well as electric light goods carriers.
- 100 percent road tax exemption for all e-carriers registered till December 30, 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 December 30, 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 like Tamil Nadu Generation and Distribution Corporation (TANGEDCO), as well as 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 3x3 Grid charging stations in Chennai, Coimbatore, Trichy, Madurai, Salem and Tirunelveli.
- One charging station will be set up at 25km 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 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. Tamil Nadu didn't see much EV adoption in FAME I, which ended on March 31, 2019. Under Vision 2023, the Tamil Nadu government envisages the state to be 'the most prosperous and progressive' one, 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.
Mahesh Babu, CEO, Mahindra Electric, said: "We welcome the draft policy by Tamil Nadu, which is both progressive and comprehensive 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, said: "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, said: “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, it will also open up a good avenue for the e-commerce and shared mobility segment.”