Karnataka govt unveils revised draft EV policy, eyes Rs 50,000 crore investment over next 5 years

Addressing an ideation session with representatives of EV industry, state minister M B Patil said the government would soon convene a joint meeting of the ministers of finance, energy, transport, and urban development to iron out common issues before launching the final E-mobility policy.

Bengaluru: The Karnataka government on Friday unveiled a revised draft Electric Vehicle policy (2023-28) which aims to attract Rs 50,000 crore investment while creating a job potential for one lakh people over the next five years.

"This proposed policy aims to transform Karnataka into a pioneering force in the field of electric mobility, embracing sustainable practices and equitable growth while fostering innovation and creating a robust ecosystem for EVs throughout the state," Minister for large and medium industries and infrastructure development, M B Patil, said on the occasion.

Addressing an ideation session with representatives of EV industry, he said the government would soon convene a joint meeting of the ministers of finance, energy, transport, and urban development to iron out common issues before launching the final E-mobility policy.

Responding to recommendations made by some of the EV industry players, Patil said that the government would develop model EV cities to promote EV adoption. These model cities would be developed in Kalaburagi, Belagavi, Hubballi-Dharwad and Mysuru among others.

The government is in discussion with the National Highway Authority of India (NHAI) to set up electric vehicle charging stations on either side of the Bengaluru-Pune national highway at 10 major toll booths, he said.

Commissioner, Department of Commerce and Industries, Government of Karnataka, Gunjan Krishna presented the draft policy highlights and said the government has identified Gauribidanur (Chikkaballapur) and Chikkamalligewada (Dharwad) as potential locations to create large EV clusters at the 'right price point'. The land in both locations has been acquired and is readily available for investors, she stated.

According to a statement from the Minister’s office, the current EV policy of Karnataka is expiring soon. The state was the first in India to launch the EV policy in 2017 and further strengthened the incentives in 2021 to ensure 'maximum benefit' to investors.

“The proposed revised draft policy has increased the capital subsidy for testing centres to 30 per cent for on-boarding best-in-class private operators for setting up EV Testing cum Certification facilities. The existing policy provides 15 per cent capital subsidy cap and one per cent Production Linked Incentives for five years,” it said.

Further, the proposed draft policy has increased the coverage to provide incentives to include cell components like anode, cathode, separators, strong hybrid vehicles, battery recycling facilities and testing infrastructure, it added.

These clusters would have six major components like ready to occupy land parcels, ready built factory/sheds, plug and play incubation facility, testing labs, proving grounds and homologation facility.

In addition, the Government of Karnataka has offered capital subsidies for micro and small enterprises to be in the range of 25 per cent -30 per cent and 20 per cent - 25 per cent, respectively. For medium-sized enterprises, incentives on the value of fixed assets (VFA) range from 20 per cent - 25 per cent, the statement said.

The draft proposes a rental subsidy to include reimbursement of 30 per cent of rent or maximum Rs five per square feet per month, for three years on rental properties above 10,000 square feet.

Meanwhile, the existing stamp duty exemption remains as per the ongoing policy.

According to the statement, to accelerate EV adoption, the proposed revised draft policy says it would rapidly identify land parcels aligned with power infrastructure for charging stations, providing favorable power tariffs.

“With approximately 2.5 lakh EVs registered and 700 charging stations in Karnataka, the state stands as the third highest in EV registrations nationally, with an eight per cent adoption rate, showcasing the state's commitment to reshape the mobility landscape,” it said.

For skill development, a strong requirement for EV industry to evolve, Industrial Training Institutes (ITIs) will play a key role; they will not just help reduce skill development cost by 40 per cent but will also bring down training tenure by 2-4 months, it added.