The state of Telangana is increasingly seeing a lot of investments from global as well as Indian players in the field of electric vehicles. In fact, it will become the first state in the India to host Formula E, in Hyderabad on February 11, 2023. Jayesh Ranjan, Principal Secretary, Industries & Commerce (I&C) and Information Technology (IT), Government of Telangana shares his thoughts on how the State aims to become a hub for R&D, manufacturing, and adoption of EVs, setting up of charging infra, and attracting new investments. Edited excerpts.
Hyderabad has become the first city in India to host Formula E. What were the key factors that helped Telangana to win the rights to host the event?
We expressed our interest in hosting Formula E in Hyderabad, but the decision was taken by the core team of the organisers. They had gone to multiple other cities and evaluated them on four key parameters – infrastructure, state government support/preparedness, financial fee and sustainability agenda.
Formula E is not an F1 race for which you create a separate track altogether, like the Buddha Circuit in Noida, it is a street race that requires proper roads. Secondly, the State government’s support in terms of barricading the route and creating viewing galleries. Thirdly, there is a financial fee to be paid to the organisers for the hosting rights. We were able to mobilise it partly from the state government and partly from a few private sponsors.
And finally, more importantly, what they see is that is Formula E racing a one-off kind of thing is there a large sustainability and sustainable mobility agenda. Telangana ticked all the right boxes and obviously scored much more than other competing cities.
What is the benefit for the Telangana government to host such an event?
In the immediate dates of the race there’ll be lots of visitors/tourists, which has a huge multiplier effect in terms of the contribution to the economy. Then there will be many first time visitors, who will recognise that this is a beautiful historic city where conferences and meetings can also be held. Many of the top corporate send their people here because they are either sponsors or associated with some racing. The visibility of the city goes up, and tomorrow something else may happen because of the visibility.
Most importantly, we are using the race occasion to position a number of sustainable mobility initiatives during the entire week. while the racing itself happens on the eleventh of February we are doing a week-long activity starting from February 5, till February10. We are also getting some global speakers to participate in the summit where we are announcing a very important initiative in an initiative which is called Telangana Mobility Valley.
This is a first-of-its-kind initiative which is getting launched on February 6, during that summit. We are focusing on both the B2B (business-to-business) element, and also a B2C (business-to-consumer) element. We are offering different kinds of programs for different stakeholders
One of the biggest challenges for EV adoption is creating the charging or the battery swapping infrastructure as the RoI is quite difficult. On the other hand, range anxiety is one of the biggest concerns for potential EV users. How do you motivate setting up of EV charging infra?
I completely agree with you, owners will not get that confidence unless you put enough chargers for vehicle. But when you ask the charging agencies to put EV chargers their question will be the business viability. But the solution is that you first put the chargers come what may. People will not drive or take that switch towards EVs on some blind faith or hypothetical assurance/assumption. What we have decided is that The Renewable Energy Development Corporation of Telangana (TSREDCO) will take the initiative to put the core number of chargers. They have decided to put 1,000 charges by mapping the state and cities, where a greater number of vehicle owners would possibly be living.
One of the challenges of charging infrastructure is also to identify land because if the private person has to search for land and either buy it out right or take it on lease first of all, it doesn’t have typically the bandwidth to deal with so many of these land transactions, and then it adds to his cost.
I’m very happy to share with you that more than 939 locations have been identified matching with the ideal requirements of the charging infrastructure. Government lands are available, and all the departments have all decided to make it available, completely free of cost. So, one big challenge on setting up the of this charging infrastructure has been taken care of by ensuring that lands are available. The private sector has also started responding because apparently the land issue was a kind of a huge problem for them, and once they have clarity, that it is getting solved by someone else, they have started responding very positively.
This step will kind materialise over the next few months, and I am very confident that we will see this to aid growth in the adoption of electric two- as well as four-wheelers.
What is Telangana government’s target for the next 3 to 5 years?
The target is not set in terms of numbers, but for all the important highways. There are 7 important highways in the Telangana state and we want ensure that once every 50 kilometers there is a charging station and in the big cities too.
Telangana over the past few years is increasingly seeing a lot of investments from electric vehicle players as well as R&D set-ups. What is the government’s target for attracting new investments?
Before the EV policy, the government did not have too much of investments, but most of the incidents have happened in the last 2 years. Our electric vehicle policy was announced in September 2020, since then we have received investments of around Rs 8,000 crore with a potential of about creating 13,000 new jobs.
On February 6, we are announcing a new initiative which is called the Telangana Mobility Valley and thereafter, in the next 5 years our ambition is to get Rs 50,000 crore or $6 billion worth of investment.
In the last two years the automotive industry has seen huge disruptions like the Covid-19 pandemic, chip shortage and supply chain issues amongst others. Despite all that, to get Rs 8,000 crore of investment is quite decent. Therefore in the next 5 years to assume that we will get around Rs 10,000 crore per year is quite possible.
Most State EV policies focus on two-, three- and four-wheelers. There is hardly any focus on agricultural products. Do you plan to provide support to e-tractors or other segments?
In our EV policy, to promote greater adoption of EVs, one of the instruments that we have used is to provide incentives to first number of users by giving them additional incentives like waiver in road tax, registration fee, and so on and so forth.
In many other States, the benefits of similar kinds have been provided but they are provided usually to two-, three- and four-wheelers, largely to passenger cars and in the three-wheeler segment to delivery vehicles. In Telangana, we have also given 100% exemption of road tax and registration fee for e-tractors.
We are in discussions with a few companies who manufacture tractors and are confident that over the next few months given the fact that we offer user incentives plus our overall policy support, we should be able to draw the attention of quite a few tractor manufacturers, and the same is true of buses and trucks also.
There is one additional advantage that we have included these buses and trucks as a part of our procurement policy. In addition, from manufacturing incentives like capital, subsidy, GST, and all that, we are also assuring them that if you manufacture in Telangana, the State government will give direct orders to them. The OEM will not be required to come through any procurement process. We will directly, bilaterally give orders to them whatever is directly within the purview of the State and also indirectly so, let us say, school buses. Like hundreds of schools, are there, so they can nudge the schools also to take buses from this company because they manufacture in Telangana rather than taking it from someone else.
Are there any orders for e-buses/trucks already in the pipeline?
For companies who have signed up with us to manufacture buses are in the process of setting up their factory. The actual production will happen only after maybe a year or a couple of years, but by that time we will be ready with direct and indirect orders.
Can you name the companies which have shown interest?
There are two companies who have already signed up with us and have recently completed land allotment are – Olelectra and the second one is Mythra. Both these 2 are going to manufacture buses in Telangana.
Telangana is focusing mostly on investments from the EV sector. Is there any similar plans for the IC-vehicle segment?
The Internal Combustion Engine (ICE) vehicle industry is pretty stabilised in India. We are not seeing any new major investment from them. Most of the legacy automotive industry are in clusters. For instance – Chakan, Maharashtra, Gurgaon, and Chennai. Those are established clusters, and obviously, we can’t do anything to supply them.