Electric vehicles: Tamil Nadu seeks first-mover advantage with new policy

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Updated: September 17, 2019 7:02:20 AM

Companies which invest a minimum of Rs 50 crore in the EV space and provide direct employment to a minimum of 50 people will get 100% refund of SGST till 2030, provided they make and sell electric vehicles in the state.

Tamil Nadu, electric vehicle, electric vehicle policy, Electric Vehicle Policy 2019, Edappadi K PalaniswamiThe Tamil Nadu EV policy assumes significance at a time when Hyundai Motor India has announced big plans for its Chennai factory.

The Tamil Nadu government has announced a host of incentives for electric vehicles (EVs) and component makers in its Electric Vehicle Policy 2019, which was released by chief minister Edappadi K Palaniswami on Monday. The policy underlines the special focus on augmenting charging infrastructure and encouraging start-ups.

Aiming to gain the first-mover advantage and woo big-ticket investments, the state government has announced 100% motor vehicle tax exemption for all EVs, including two-wheelers, cars, auto-rickshaws, buses and light goods carriers till December 2022. Companies which invest a minimum of Rs 50 crore in the EV space and provide direct employment to a minimum of 50 people will get 100% refund of SGST till 2030, provided they make and sell electric vehicles in the state.

The government also plans to offer incubation services in the form of office space, common facilities and mentoring support to encourage start-ups in the EV sector. Tamil Nadu Generation and Distribution Corporation (Tangedco) would set up charging infrastructure through public-private-partnership models. The policy also provides a capital subsidy of up to 15% to EV makers and up to 20% to battery makers on investments made till 2025, a government statement said.

The Tamil Nadu EV policy assumes significance at a time when Hyundai Motor India (which recently unveiled Kona EV) has announced big plans for its Chennai factory.

Ashok Leyland is also making huge investments towards electric bus making in the state. Nissan India, which has a factory near Chennai, is also looking at introducing its global EV, Leaf, in India. Renault India, which also has a base in Chennai, has hinted at going for EVs by 2022. Players such as Ford, BMW and Daimler are also keen on introducing EVs in India.

Welcoming the lead taken by Tamil Nadu in announcing an EV policy, Society of Manufacturers of Electric Vehicles (SMEV) director-general Sohinder Gill said, “It is a great move by the state to encourage manufacturers to set up plants while motivating citizens to adopt a cleaner mode of transport. The policy offers multiple non-fiscal support that would certainly help the industry 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.”

The TN policy note says investments in EV projects in government industrial parks would get a 20% subsidy on land price, and those which choose the state’s southern parts/region (industrially backward areas now) would get a subsidy of up to 50%. These incentives would be valid till 2022. A 100% exemption on land registration fee and a 100% exemption on electricity tax have also been offered. The state government would provide funds to procure and deploy electric vehicles across its departments. An open permit system for three-wheeler EVs would also be implemented, the policy note says.

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