June 19, 2024

“Revitalizing India’s EV Sector: Tamil Nadu’s New Policy to Boost Growth”

Capital Subsidy for 200 Battery-Swapping Stations:

Up to Rs 2 Lakhs on Machinery and Equipment Cost – 25% of Total Subsidy

Tamil Nadu has recently unveiled a new electric vehicle policy, aimed at boosting the growth of the EV sector in the region.

Under this policy, both private and public charging stations, as well as battery swapping stations, will be eligible for capital subsidies. Additionally, the policy provides special incentives for re-manufacturing and retrofitting.

One of the key features of the new policy is the government’s plan to prepare a roadmap for the electrification of all institutional and public fleets in the state.

The roadmap will be implemented in phases, and will play a significant role in reducing the carbon footprint of the state. This move is in line with India’s goal of achieving 100% electrification of its public transportation system by 2030.

In order to encourage the adoption of EVs, the Tamil Nadu government has also announced a slew of tax incentives and exemptions. These include a waiver of road tax and registration fees for EVs, as well as a reduction in electricity tariffs for EV charging stations.

The capital subsidy for battery swapping stations is particularly noteworthy, as it will cover up to 25% of the cost of machinery and equipment for up to 200 such stations, up to a maximum of Rs. 2 lakhs.

Battery swapping is seen as a key solution to the range anxiety faced by EV owners, as it allows them to quickly swap depleted batteries for fully charged ones, rather than waiting for their batteries to recharge.

The new policy is expected to provide a major boost to the EV sector in Tamil Nadu, and is likely to attract significant investments from both domestic and international players.

TN is already home to several leading EV manufacturers, including Mahindra Electric, Ather, according to a government spokesperson the State aims to increase the percentage of electric buses in the fleet operated by State Transport Undertakings to 30% by 2030.

The recently unveiled electric vehicle policy acknowledges that the EV industry is evolving rapidly, and therefore needs to be reviewed periodically to ensure a seamless policy approach that addresses various sectoral challenges, from supply to demand.

The policy, which was first introduced in 2019, initially offered exemptions for road tax, permit fees, and registration until December 31, 2022.

However, the new policy extends these exemptions by three years and also provides special demand-side incentives until December 31, 2026. It is worth noting that these schemes and incentives will only be available if the vehicles are registered, sold, and manufactured within Tamil Nadu.

The new policy also includes a capital subsidy of 25% on the cost of equipment and machinery for 200 public fast charging stations (up to Rs. 10 lakhs), 500 public slow charging stations (up to Rs. 1 lakh), and private fast charging stations (up to Rs. 10 lakhs).

This move is expected to encourage the establishment of a robust charging infrastructure, which is crucial for promoting EV adoption.

Overall, the new policy is designed to address the key challenges faced by the EV industry in Tamil Nadu and promote the growth of the sector. With a focus on developing a supportive ecosystem, both for supply and demand, the policy is expected to attract investment and stimulate the local economy.

The policy stipulates that 25 percent of the capital subsidy, amounting to up to Rs 2 lakhs, will be granted for the machinery and equipment costs of 200 battery-swapping stations.

The policy distinguishes between low charging stations, which lack DC fast chargers, and fast charging stations, which are equipped with a maximum capacity of 50kW and one or more DC fast chargers.

Both slow and fast public charging stations must have at least three chargers, and private charging stations will only be accessible to vehicles operated by commercial fleet operators.

Additionally, the policy offers an employment incentive for projects, whereby employers’ contributions to the EPF for all newly created jobs during the policy period will be reimbursed.

This incentive will be provided for one year and will not exceed ₹48,000 per employee for Tamil Nadu residents.

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