The Future is Electric: Karnataka’s Bold 2023 EV Policy Agenda

The Karnataka state government is set to introduce a revised Electric Vehicle (EV) policy for 2023-28, aiming to significantly boost the EV sector in the region. This ambitious policy is designed to attract an investment of approximately Rs 50,000 crore and generate job opportunities for one lakh individuals over the next five years. The government’s goal is to position Karnataka as a leader in electric mobility, focusing on sustainable practices, equitable growth, innovation, and the development of a robust statewide EV ecosystem​​.

Key Highlights of the Revised EV Policy:

  1. Enhanced Capital Subsidies: The proposed policy includes increased capital subsidies for testing centers, providing up to 30% for on-boarding private operators for setting up EV Testing cum Certification facilities. This represents a significant increase from the existing 15% capital subsidy cap.
  2. Incentives for Component Manufacturing: The policy broadens the range of incentives to cover cell components like anode, cathode, separators, as well as battery recycling facilities and testing infrastructure. These incentives are aimed at supporting micro, small, and medium-sized enterprises.
  3. Rental Subsidies and Stamp Duty Exemption: The draft policy proposes a rental subsidy, offering reimbursement of 30% of rent or a maximum of Rs five per square foot per month for three years on rental properties above 10,000 square feet, alongside the existing stamp duty exemption.
  4. Land Identification for Charging Stations: The government commits to rapidly identifying land parcels aligned with power infrastructure for the development of charging stations, providing favorable power tariffs to accelerate EV adoption.
  5. Establishment of Model EV Cities: The government plans to develop model EV cities in locations such as Kalaburagi, Belagavi, Hubballi-Dharwad, and Mysuru, among others. This initiative is designed to promote EV adoption across the state.
  6. Skill Development through ITIs: Industrial Training Institutes (ITIs) will play a crucial role in skill development for the EV industry, aiming to reduce skill development costs by 40% and shorten training tenure by 2-4 months​​​​.

Industry Reactions and Suggested Improvements:

The industry has reacted positively to the increased subsidies and incentives, but there is a consensus on the need for more focused incentives for consumers and component suppliers. Key suggestions from industry stakeholders include:

  • Direct Subsidies for EV Buyers: Amitabh Saran, CEO of Altigreen, suggests providing direct subsidies to EV buyers to make EVs more affordable, especially for commercial vehicles. This comes in response to the recent reduction in subsidies under the central government’s FAME scheme.
  • Inclusion of MSMEs and Component Vendors in Incentives: There’s a call for including MSMEs and component vendors in state-level production-linked incentive (PLI) schemes and reducing the GST on components from 18% to 5%.
  • Clarity on Testing Centres: There is a need for clarity on the role of new testing centres and how they will expedite the EV certification process​​.

Overall, the revised draft EV policy of Karnataka demonstrates the state’s commitment to reshaping its mobility landscape, aiming to maintain its position as a leader in EV adoption and manufacturing, while addressing the evolving needs of the industry and consumers.



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