Tamil Nadu EV Policy Proposes 100% Road Tax Exemption On Electric Cars Until 2022

Encouraging the adoption of electric vehicles (EVs) in the state, the government of Tamil Nadu has announced the Electric Vehicle Policy draft with a number of recommendations and changes for the EV sector. The big takeaway from the announcement will be the 100 per cent exemption on registration fees for EVs till the end of 2022. According to the policy draft, the state government plans to become a hub for the EV ecosystem, not just in terms of supply but manufacturing as well. The draft proposes a number of incentives to industries and buyers in a bid to attract Rs. 50,000 crore investment in EV manufacturing and creation of over 1.5 lakh new jobs. Here's a detailed look at the Tamil Nadu EV Policy.

1. The Tamil Nadu state government has proposed a 100 per cent road tax exemption to be provided for private and commercial electric vehicles till December 30, 2022. The waiver of registration charges will be done as per the central government's notification, and will be applicable to two-wheelers, three-wheelers and four-wheelers.
2. The draft policy also proposes 100 per cent exemption on electricity tax till December 31, 2025, for EV related and charging infrastructure manufacturing industries in the state. The EV related industries will also receive benefits to obtain land by sale or lease with a 100 per cent exemption on stamp duty for transactions till December 31, 2022.
   
   Reacting to the EV Policy, Tarun Mehta, CEO and Co-Founder, Ather Energy said, "Tamil Nadu's EV policy has taken into account the entire EV ecosystem and is extremely comprehensive. Removing the Road tax for end consumers will have a positive impact on the adoption rate of EVs in the state. And refunding the SGST along with the plethora of other OEM focused incentives make the state an attractive hub for manufacturing. The state has taken a long term approach to building R&D and skilled labour by also considering adding EV design and build to the curriculum in the state's technical colleges. This creates a pipeline of talent for an industry that is currently managing with a dearth of talent that has hands on experience with EVs. The only aspect that will need more support is the charging infrastructure. As the policy mentions it is a critical part of the ecosystem and needs to be addressed. Fiscal support in the form of subsidies or investments in the sector would go along way to make TN a hub for EVs."
   
3. Tamil Nadu plans to promote conversion of all auto rickshaws to e-vehicles in six major cities in the state including Chennai, Coimbatore, Trichy, Madurai, Salem and Tirunelveli - within a span of ten years. It will be gradually extended to other cities, while the state will also support the conversions to EVs for app-based transport aggregators across the six cities over a period of ten years.
4. The State Transport Undertakings (STUs) will also replaced five per cent of the buses to EVs every year and around 1000 electric buses will be added to the fleet every year. The government plans to have one slow charging unit for every electric bus and one fast charging station for every 10 e-buses. Private operators will also be encouraged to transition to e-buses; albeit as a personal choice.
   

   The exemption will further push sales of electric two-wheelers that are gaining momentum

5. This also applies to mini buses and vans used to educational institutions to transition to EV alternatives gradually. Currently, the state has over 32,000 buses, mini buses and vans run by institutions.
   
   Speaking on the draft policy, Mahesh Babu, CEO, Mahindra Electric said, "We welcome the draft policy by Tamil Nadu which is both progressive and compehensive in nature. It outlines clear adoption strategies for last mile connectivity through 3-wheelers and shared mobility by 4-wheelers. We appreciate the demand side incentives provided by the government like road tax exemption, zero permit fees, registration charges waiver for 3-wheelers. We are looking forward to the implementation of this draft policy soon. Mahindra is ready with products like the TREO for helping the state achieve its EV adoption goal."
   
6. Mini good vehicles and light commercial vehicles will be concourage to convert to EVs, with e-commerce and delivery companies particularly encouraged by the state government. The state government has kept more room for larger capacity goods transport vehicles, considering the limited range and battery capacity available for trucks.
7. Businesses setting up EV and charging infrastructure industries in the state will also be provided with a 15 per cent subsidy if they obtain land from SIPCOT, SIDCO or other governmental agencies. A 50 per cent subsidy will be provided if the industry is located in southern districts of Tamil Nadu.
8. There also employment incentives in the form of reimbursement of employer's contribution to the EPF for all new jobs created till December 31, 2025 for all EV related manufacturing units. The incentive though will be paired for a period of one year and will not exceed Rs. 48,000 per employee.
   
   Nagesh Basavanhalli, MD and CEO, Greaves Cotton said, "We welcome The Tamil Nadu State Government's policy on electric vehicles and it is a great initiative. With this, we inch a step closer to the dream of pollution-free, affordable EV mobility in the last mile. While this accelerates the adoption of electric vehicles, this will also open up a good avenue for the e-commerce and shared mobility segment."
   
9. The Tamil Nadu EV Policy also proposes higher capital subsidy of 20 per cent on investments of over 20 years for EV battery manufacturing. The units also eligible for a 20 per cent and 50 per cent land subsidy in southern districts of the state. The special package will be applicable for investments made till December 31, 2025.
10. The government also plans to develop exclusive EV parks in major auto manufacturing hubs to attract potential investments and create a vendor ecosystem that will serve OEMs. Incentives under various schemes will be applicable for the MSME sector as well, while the government will also promote MSME sector and free trade warehousing zones.
11. Furthermore, the draft proposes assistance to existing investors to transition to EV manufacturing. The base volume production necessary for other industries will not be applicable for EV manufacturers. Current automakers will be provided a one-time re-skill allowance for every existing employee in the production line. The proposals under the draft will be a part of the 'EV Special Manufacturing Package,' and will be eligible based on the recommendation of the Tamil Nadu Industrial Guidance and Export Promoon Bureau.
12. Under the EV Policy, electric vehicles will be registered using a green number plate with white font for private vehicles, and yellow font for tourist vehicles under Central Motor Vehicle rule. The draft also proposes to amend the building and construction laws to ensue that the charging infrastructure is integrated in the planning stage itself in new constructions for apartments in cities. At least 10 per cent of parking space will be earmarked for EVs in commercial buidings.
13. The draft proposes to redesign the curriculum for engineering colleges, ITI and polytechnics to incorporate courses that suit the EV industry. The draft also proposes to create a steering committee for EV and chariging infrastructure. The industries department will be the nodal department for the implementation of all manufacturing related incentives under the EV Policy in Tamil Nadu.
14. The Tamil Nadu government's also plans to invite battery recycling business to establish their presence in the state. The charging station operators will also be encouraged to operate as end-of-life battery recycling agencies. OEMs should take responsibility for old batteries and components, according to the draft.