Electric vehicles have grabbed the fancy of India states

Gujarat, Telangana to roll out policies to encourage manufacturing

With the Centre making its intent on electric vehicles clear, state governments are swinging into action to capture the new investments that automobile makers would make to manufacture such vehicles.

Three weeks ago, Karnataka became the first state to roll-out an electric vehicle policy to encourage manufacturing.

Telangana, another state with an automobile manufacturing base, is learnt to be working on a policy.

Gujarat, a prominent state for auto manufacturing, has already attracted investments worth over Rs 5,000 crore (Rs 50 billion), making it envy for other states.

This includes a Rs 4,000-crore (Rs 40 billion) investment commitment from JSW Group for electric cars and a Rs 1,151-crore (Rs 11.51 billion) plan of Suzuki to set up a lithium-ion battery unit with Toshiba and Denso.

Tata Motors, which has bagged the country’s biggest tender for 10,000 electric cars, would make these vehicles (electric Tigor) at its Sanand plant in Gujarat. So Gujarat would have a natural lead over competing states.

Manoj Das, principal secretary (industry and mines) at Gujarat government, told Business Standard that the state was evaluating various options and a policy for electric vehicles was “under consideration” and “an announcement will be made at the right time”.

He said the JSW project falls under a mega project and would get the incentives that exist for such large projects.

The Union government aims to have an all-electric fleet of vehicles by 2030.

“The centre can only show a direction but all investments happen at the state level, who also benefit from tax revenue and employment generation. States will have to draw suitable policies to catch investors’ attention. There will be a competition,” said an industry official.

The electric vehicle space is attracting new participants, including start-ups who would want to make investments.

Karnataka, which boasts of a presence of leading automobile companies, such as Toyota, Volvo, Honda Motorcycles and Bosch, launched an Electric Vehicle and Energy Storage Policy 2017.

The policy aims to attract investments worth Rs 31,000 crore in electric vehicle manufacturing and charging infrastructure.

“I am sure this policy would be a game-changer in the industry and will be a model for other states. Our real work starts now, focusing on developing a ready ecosystem for a vibrant EV sector in the state,” R V Deshpande, Karnataka’s industries minister, said, announcing the policy last month.

Telangana is also preparing to come up with a policy for electric vehicles.

It is learnt to be seeking inputs from industry bodies and other experts.

Other states with a large automobile manufacturing base such as Haryana, Maharashtra and Tamil Nadu have not spelt out electric vehicle policy as of now.

Mahindra & Mahindra, which in May announced setting up a battery pack facility in Maharashtra’s Pune, did not comment on queries seeking details of incentives (if any) that it got from the state government.

Photograph: Shailesh Andrade/Reuters