In the new policy, all the electric vehicles will be exempted from Motor Vehicles Tax till 2022 while the manufacturers will get incentives on investment, land cost and 100 per cent exemptions from State Goods and Services Tax (SGST), land registration fees and electricity tax. The Tamil Nadu Electric Vehicle Policy 2019 has set out a vision to attract Rs 50,000 crore investments in EV manufacturing and create 1.5 lakh new jobs. According to the policy document, a dedicated strategy is needed to address EV prices, create public charging infrastructure and spur investments, in order to promote adoption of such vehicles.
Under the supply-side incentives to promote EV manufacturing within the State, the government will offer a 100 per cent reimbursement of SGST on sale of EVs made, sold and registered within the State till December 2030. Capital subsidy of 15 per cent and 20 per cent will be offered for investments in EV manufacturing and battery production, respectively till 2025. Industries operating in this space will also be completely exempt from electricity tax till December 2025. For projects started in southern districts, the investors will get 50 per cent subsidies until 2022. The State has also announced subsidies on the sale or lease of land for manufacturing EVs and creating charging infrastructure.
To promote EVs in the public transport, the State has set itself a target to have all auto-rickshaws, taxis and app-based transport operators and aggregators converted to electric within 10 years in six major cities -- Chennai, Coimbatore, Trichy, Madurai, Salem and Tirunelveli.
Tamil Nadu’s State Transport Undertakings (STUs), which ply some 21,000 buses, would strive to replace around 5 per cent of their existing vehicles with EVs every year and around 1,000 EV buses may be introduced every year. “Buses are expected to be charged at the Depots using the 3-Phase electric connection, supported by small top-up charging at smaller stations,” it said. Stating that the objective of this policy is to create an enabling environment to provide private and public charging infrastructure in the State, the policy added that the State will invest in charging stations with active participation from public sector units including TANGEDCO, and from private players, for whom appropriate capital subsidy will be available. The Government will undertake to set up 3x3 Grid charging stations in six major cities, with one for every stretch of 25 km on both sides of National and State Highways.
In an effort to boost the sales of the electric vehicles (EV) in the State, Tamil Nadu has announced 100 per cent road tax exemption for all EVs, including two-wheelers, cars, auto-rickshaws and buses.
Motor vehicle registrations in Tamil Nadu have risen 12.4 per cent a year to touch more than 27.7 million in 2019 from 321,000 in 1981. As of July this year, the State accounts for 6.4 per cent EVs sold in the country. The EV penetration at the end of phase-I of Faster Adoption and Manufacture of (Hybrid and) Electric Vehicles (FAME) remained low. The projected total vehicle population for 2030 is 9.8 crores. “Given that the transportation sector currently accounts for nearly one-fourth of greenhouse gas emissions, there is an immediate need to transition to an alternate cost-effective fuel that creates less pollution,” the policy said.
The policy encourages both the transportation and non-transportation vehicles to be converted into EVs. Electric two-wheelers will be granted complete road tax exemption till December 2022, along with a waiver on registration charges, while private cars will get a waiver on registration charges and 50-100 per cent road tax exemption till 2022.
To encourage EVs in shared mobility, the policy said that TN would promote conversion of all autorickshaws, taxis and app-based transport operators and aggregators within 10 years in six major cities -- Chennai, Coimbatore, Trichy, Madurai, Salem and Tirunelveli. “This will be extended to other cities and towns in a gradual manner,” it said.
Tamil Nadu’s State Transport Undertakings (STUs), which ply 21,000 buses, would strive to replace around 5 per cent of their existing vehicles with EVs every year. Private operators of buses and vehicles operated by the educational institutions will also be encouraged to transition, it said.
The policy also dwells on public-private Partnership models. Tariff for the supply of electricity to Public Charging Stations (PCS) will be determined by the State electricity regulatory commission and it will be no more than the 15 per cent above the average cost of supply. Renewable energy will be supplied in priority for charging stations, and will come at zero connection cost.
E-vehicle makers to get benefits, including reimbursement of SGST
State government’s e-vehicle policy offers a series of incentives, including reimbursement of State GST, capital subsidy, and exemptions from electricity tax and stamp duty.
Other incentives include subsidy on land cost, special package for battery manufacturing and EV parks.
It offers full reimbursement of SGST on the sale of EVs manufactured, sold and registered in the State. Reimbursement up to 100 per cent of eligible investment will be given with effect from December 2030.
Fifteen per cent capital subsidy will be given over 10 years, payable on eligible investments made in the State.
“EV related and charging infrastructure manufacturing industries will be provided 100 per cent exemption on electricity tax till December 2025,” the policy said, adding that units obtaining land by sale or lease will get full exemption on stamp duty.
Besides 15 per cent subsidy on land cost, the government will also provide higher capital subsidy of 20 per cent of the investment over 20 years for units manufacturing batteries.
Recognising that a dedicated infrastructure ecosystem was required to attract major investments, it has also been decided to develop exclusive EV parks in major auto manufacturing hubs and also in the areas with potential to investments.
“To assist existing investors to transition into the EV manufacturing system, the principle of maintaining base volume production for expansion projects will be applicable for EV manufacturers,” the policy added.
Also, a separate ‘EV Special Manufacturing Package’ will be constituted. “It will be sanctioned on the recommendation of the TN Industrial Guidance and Export Promotion Bureau,” it said.
Govt to promote battery recycling
In a bid to reduce e-waste and recycle the batteries discarded from automobiles, the State government in its policy announced that it will set up a recycling business platform inviting EV manufacturers and related stakeholders.
Charging stations will be encouraged to operate as the end of life battery recycling agencies. EV owners can deposit their vehicle batteries.
Appropriate protocols and investment subsidies will be given for entrepreneurs to open battery recycling units. At present, the radio market in Chennai and the automobile cluster units in industrial estates are recycling battery shells and a few components.
There is a need for more technology-driven recycling and this will be explored, said an official, admitting that the policy is already late. Chennai is a hub for automobiles and it is exploring all options to promote e-vehicles manufactured in Chennai, the official said, adding that State will soon release GOs related to EV policy with a validity of 10 years.
“We are yet to recycle the waste generated in Chennai and the government is now talking about recycling batteries from cars. We have to wait and see what the government and the industry do,” said civic activist Aarani Srinivasan.