Net-Zero Carbon Future: Tamil Nadu Announces New Electric Vehicle Policy, To Attract Rs 50,000 Crore Investment

The Tamil Nadu (TN) government has unveiled a new electric vehicle (EV) policy  to promote the growth of a strong EV ecosystem in the state.

The ‘Tamil Nadu Electric Vehicles Policy 2023’ was released by Chief Minister M K Stalin on Tuesday (14 February). The government intends to raise Rs 50,000 crore for EV manufacturing and to generate employment for 1.5 lakh people.

The new strategy aims to promote EV adoption, strengthen the state's ecosystem development, and create EV cities in Tamil Nadu. It also aims to make TN a popular location for EV manufacturing in South-East Asia.

Cities like Tiruchirappalli, Coimbatore, Chennai, Madurai, Salem, and Tirunelveli would serve as pilot cities for implementing e-mobility solutions in the state. 

The policy intends to build exclusive EV parks at its EV hubs of Krishnagiri and Manallur (Chennai), reports Economic Times. 

On a broader level, the policy has announced supply-side and demand-side measures, charging infrastructure, ecosystem development, and a mechanism for policy execution.

The policy document reveals, among other things, that the state intends to reimburse State Goods and Services Tax (SGST), and provide turnover-based subsidies, capital subsidies, and special Advanced Chemistry Cell capital subsidies.

The policy shall be valid for five years from the date of the policy notification, or until a new one is announced, according to a government release.

The policy, among other steps, addresses two crucial issues: the registration of commercial EVs and a potential change of demand and energy rates for public charging stations. 

The State will take steps to gradually electrify public transportation vehicles, starting with the EV cities. The conversion of e-commerce and other e-aggregator enterprises' cars to EVs would be promoted. 

The new EV strategy offers to revise demand and energy pricing for public charging stations, subject to regulatory clearance. The proposed adjustments include a 75 per cent decrease in existing costs for the first two years and a 50 per cent reduction in energy prices for the subsequent two years. 

The presence of major manufacturers like Hyundai, Nissan, TVS, Mahindra, and Daimler is indicative of Tamil Nadu's expansion as a hub of the automotive industry, according to the government release.

The state's robust manufacturing environment has encouraged new entrants such as Ather Electric, Ola Electric, Ampere, and others to establish electric vehicle production facilities.

National Policy

To assist the acceptance of EVs in the country, the central government has announced a number of promotional measures in the previous ten years, including tax incentives for electric vehicle owners, public EV charging infrastructure development, and so on.

Timeline for various initiatives taken by policymakers and regulators:

At the COP26 meeting in Glasgow in 2021, India committed to a five-part "Panchamrit" plan, including reaching 500 GW of non-fossil electricity capacity, generating 50 per cent of all energy demand from renewables, and reducing emissions by one billion tonnes by 2030.