Tamil Nadu's new EV policy offers incentives for manufacturers, users

State offers subsidies and tax breaks, will declare six cities as EV cities

Tamil Nadu will encourage electric vehicles (EV) by offering incentives to manufacturers, customers and charging-infrastructure providers, announcing a new policy after seeing investment interest of around Rs 24,000 crore in the last five years.

Incentives for manufacturers under the Tamil Nadu Electric Vehicles Policy 2023 include 100 per cent reimbursement on state goods and services tax (SGST), investment- or turnover-based subsidy, and advanced chemistry cell subsidy. The state for five years will fully exempt tax on electricity purchased from its discom, exempt stamp duty and subsidise land cost. In the last five years, the state has seen EV projects with employment potential of 48,000 jobs.

Tamil Nadu will gradually make a substantial share of its public transport EV based. State transport utilities will be encouraged to electrify fleets through loan programmes from multilateral agencies. The state may increase the share of electric buses to 30 per cent of the fleet by 2030.

For people using EV, there will be exemptions and waivers on road tax, registration charges and permit fees. This is in addition to purchase incentives ranging between Rs 5,000 and Rs 10 lakh.

The state will develop bus-charging infrastructure through budgetary allocations and exploring the option of providing the infrastructure as a service for private operators. Private buses, vehicles of schools and colleges will be encouraged to transition to EV. In addition to this, aggregators may be encouraged to partner with e-mobility providers and EV manufacturers to phase out internal combustion engine vehicles from their fleet.

EV projects will be given an employment incentive in the form of a reimbursement of the employer's contribution to EPF—maximum Rs 48,000 per employee residing in Tamil Nadu—for all new jobs created during the policy period. Companies that establish public charging stations in Tamil Nadu and comply with the guidelines issued by the Union Power Ministry will be eligible for a 25 per cent  subsidy of the cost involved in the purchase of equipment and machinery during the policy period. The first 50 private charging stations will also be eligible for this capital subsidy of 25 per cent.

Tamil Nadu will revise the power tariff for public charging stations. It will declare six cities—Chennai, Coimbatore, Tiruchirappalli, Madurai, Salem, and Tirunelveli—as EV cities. In these places, a Smart City Commissioner will be the nodal officer for EV adoption.