The recently released draft policy has garnered varied reactions from stakeholders, with some praising the suggested subsidy hike for its potential benefits. However, there’s a consensus that more focus should have been placed on incentives for consumers and component suppliers.
Karnataka is finalizing its new electric vehicle (EV) policy, expected to be unveiled in about two weeks. The draft policy, released earlier this month, has received mixed reactions, with some stakeholders appreciating the proposed increase in subsidies but calling for more incentives for consumers and component vendors.
This policy aims to create 100,000 jobs and attract Rs 50,000 crore investment in Karnataka. The draft, made public by the industries department, is currently under review based on the feedback received. Amitabh Saran, CEO of Altigreen, suggests that direct subsidies for EV buyers, rather than through the FAME scheme, would make EVs more affordable, especially for commercial vehicles.
The central government’s FAME scheme, which has been instrumental in promoting EV adoption, recently saw a subsidy reduction from 40% to 15%, leading to a price increase in EVs. Saran also advocates for the inclusion of MSMEs and component vendors in state-level production-linked incentive (PLI) schemes and suggests reducing the GST on components from 18% to 5% to ease cash flow issues for smaller companies.
The proposed policy includes incentives like rent subsidies for EV-related facilities and increased capital subsidies for setting up testing centres. Vivekananda, HR of Bounce, view these moves as potentially transformative, speeding up the EV certification process, though he seeks clarity on the role of new testing centres.
Karnataka, a leader in EV adoption with significant registrations and home to several EV manufacturers, is facing competition from Tamil Nadu, which has attracted companies like Ola Electric and Ather. The new policy aims to reinforce Karnataka’s position as a prime destination for EV manufacturing and research.