Karnataka aims for Rs 50,000 crore investment with new e-mobility policy

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In a bid to create a robust ecosystem for Electric Vehicles (EVs) in Karnataka, the state government unveiled a revised draft EV policy (2023-28) on November 10.

The policy aims to attract an investment of Rs 50,000 crore while creating job opportunities for one lakh individuals.

"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 EV ecosystem throughout the state," said MB Patil, Karnataka's minister for large and medium industries and infrastructure development.

During an ideation session with representatives of the EV industry, Patil said that the government would soon convene a joint meeting of ministers responsible for finance, energy, transport, and urban development to address common issues before launching the final e-mobility policy.

In response to recommendations from the EV industry, Patil said that the government plans to develop model EV cities across the state to promote EV adoption. "These model cities would be developed in Kalaburagi, Belagavi, Hubballi-Dharwad, and Mysuru, among others," he added.

Patil also revealed ongoing discussions with the National Highway Authority of India (NHAI) to set up EV charging stations at ten major toll booths along the national highway between Bengaluru and Pune.

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 available for investors.

"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," stated a release from the industries department.

The proposed revised draft policy increases the capital subsidy for testing centers to 30 percent for onboarding best-in-class private operators to set up EV testing cum certification facilities. The existing policy provides a 15 percent capital subsidy cap and a one percent Production Linked Incentive for five years.

Further, the proposed draft policy expands coverage to provide incentives for cell components such as anode, cathode, separators, strong hybrid vehicles, battery recycling facilities, and testing infrastructure.

These clusters would include six major components: ready-to-occupy land parcels, ready-built factory/sheds, plug-and-play incubation facilities, testing labs, proving grounds, and homologation facilities.

Additionally, the Karnataka government offers capital subsidies for micro and small enterprises in the range of 25 percent-30 percent and 20 percent-25 percent, respectively. For medium-sized enterprises, incentives on the value of fixed assets (VFA) range from 20 percent-25 percent.

The draft proposes a rental subsidy, including reimbursement of 30 percent of rent or a maximum of Rs 5 per square foot per month for three years on rental properties above 10,000 square feet. The existing stamp duty exemption remains unchanged according to the ongoing policy.

To accelerate EV adoption, the proposed revised draft policy aims to rapidly identify land parcels aligned with power infrastructure for charging stations and provide favorable power tariffs.

With approximately 2.5 lakh EVs registered and 700 charging stations in Karnataka, the state ranks as the third-highest in EV registrations nationally, boasting an 8 percent adoption rate and showcasing the state's commitment to reshape the mobility landscape.

For skill development, crucial for the evolution of the EV industry, the Industrial Training Institute (ITI) will play a key role. It is expected to not only reduce skill development costs by 40 percent but also shorten training tenures by 2-4 months, according to the proposed policy.