Tamil Nadu Electric Vehicle Policy
The southern Indian state of Tamil Nadu will encourage electric vehicle (EV) adoption through a comprehensive set of incentives and subsidies for manufacturers, customers, and charging infrastructure providers. The move comes after the state saw investment interest of around Rs 24 billion ($3.2 billion) in the electric vehicle sector over the past five years, with several projects offering a potential of 48,000 jobs. job.
GST measures
Tamil Nadu’s EV Policy 2023 includes measures such as a 100% refund of State Goods and Services Tax (SGST) for EV manufacturers, subsidies based on investment or turnover, and subsidies for advanced chemistry cells.
exemptions
The state will also tax-exempt electricity purchased from its discom for five years, exempt stamp duty and subsidize land costs. In addition, the state will offer a variety of incentives to people who use electric vehicles, including waivers and exemptions from road tax, registration charges, and permit fees, as well as purchase incentives ranging from Rs 5,000 to Rs 10 lakh.
Incentives for Electric Bus in the TN EV policy
Tamil Nadu plans to gradually transition a significant portion of its public transport fleet to electric vehicles, with state-owned transport companies being encouraged to electrify their fleets through lending programs from multilateral agencies. The state aims to increase the share of electric buses in its fleet to 30% by 2030. School and university buses and private vehicles will also be encouraged to switch to electric vehicles.
Tamilnadu State Incentives for EV Drivers
| Guy | vehicle category | Battery Capacity Incentives | Maximum Incentives | Estimated number of vehicles to incentivize |
| Private | e-cycles | – | 20% of the cost up to 5,000 | 6,000 |
| Commercial | E2W | 10,000 kWh | 30,000 | 6,000 |
| Commercial | E3W | 10,000 kWh | 40,000 | 15,000 |
| Commercial | E4W | 10,000 kWh | 1,50,000 | 3,000 |
| Commercial | e-buses | 20,000 kWh | 10,00,000 | 300 |
Charging incentives under the TN EV policy
Under FAME II, a total of 281 charging stations have been sanctioned for Tamil Nadu, which will serve as a boost for charging infrastructure development. To facilitate the adoption of electric vehicles, Tamil Nadu will develop charging infrastructure through budget allocations and will explore the option of providing the infrastructure as a service for private operators. The government plans to use these measures to improve charging infrastructure.
- Site identification for public slow and fast charging stations at government offices and public places, Smart City Missions/Corporations of the EV Cities.
- Identify and prioritize the establishment of charging stations on National and State Highways in 25km intervals on Both Sides.
Public Charge Incentives
| Guy | incentives |
| Fast charging stations (200) | Up to Rs 10,00,000 |
| Slow charging stations (500) | Up to Rs 1,00,000 |
Private charging incentives
| Guy | incentives |
| Fast charging stations (50) | Up to Rs 10,00,000 |
The policy also includes employment incentives for EV projects, with a refund of the employer’s contribution to EPF for all new jobs created during the policy period. Companies establishing public charging stations in Tamil Nadu will be eligible for a subsidy of 25% of the cost involved in purchasing equipment and machinery during the policy period. The first 50 private charging stations will also be eligible for this 25% capital subsidy.
Incentives for Battery Exchange Station
The first 200 public battery exchange stations established in Tamil Nadu will be eligible for a capital grant of 25% on the cost involved in the purchase of equipment and machinery limited to Rs. 2 lakhs per station.
| Guy | incentives |
| Battery charging stations | Up to Rs 2,00,000 |
interest subsidy
As per the Tamil Nadu EV Policy 2023, the state government will provide a 5% interest subsidy as interest rate repayment on real-term loans taken to finance EV projects. This incentive will be available for a period of 6 years, subject to certain limits. The aim of this initiative is to incentivize the development and adoption of electric vehicles in the state of Tamil Nadu by providing financial support to companies and organizations that invest in EV projects.
| Investment range (in crores) | Maximum interest subsidy period | Ceiling/annual (Rs.) |
| 50-300 | 6 | 5 lakhs |
| 300-500 | 6 | 20 lakhs |
| 500-5,000 | 6 | 1 million rupees |
| 5000+ | 6 | 4 crores |
The incentive for the Creation of Intellectual Property
The Tamil Nadu government is introducing an intellectual property creation incentive to encourage companies to develop new technologies in the state. This incentive will offer reimbursement of 50% of the cost incurred for patents, copyrights, and trademarks, up to a maximum of Rs. 1 crore for the investment period, during the policy period. The objective of this incentive is to motivate companies to invest in the research and development of innovative electric vehicle technology by providing financial support for the creation of their intellectual property.
Special incentives for MSMEs
Capital grant of 20% above the limit of the existing capital grant regime. In addition, medium-sized MSMEs that borrow from the Tamil Nadu Industrial Investment Corporation for these activities will receive an interest subsidy of 6% instead of the current 3%.
Transition to the electric vehicle industry
The TN government is also giving transition benefits to ICE manufacturing companies. Automotive companies will get an upgrade subsidy of up to 10% of their current workforce on the electric vehicle production line. Transition support will be provided through a Training allowance of Rs. 4,000 per worker per month for six months for residents of Tamil Nadu. However, for women and transgender employees baseline people with disabilities, and people from SC/ST communities, the training allowance will be higher by Rs. 6,000 per worker per month for six months. These measures aim to promote the growth of the electric vehicle industry in the state and, at the same time, encourage social inclusion and job creation.
Benefits of Giving Subsidies
The benefits of offering EV subsidies are numerous. First, it helps reduce the cost of electric vehicles, making them more affordable for consumers. This, in turn, encourages more people to adopt electric vehicles, which can lead to reduced greenhouse gas emissions, better air quality, and less reliance on fossil fuels. In addition, subsidies can incentivize the development and deployment of charging infrastructure, which is essential for the widespread adoption of electric vehicles.
way to go
Tamil Nadu’s EV Policy by 2023 is an important step in encouraging EV adoption in the state. The comprehensive set of incentives and subsidies for manufacturers, customers, and charging infrastructure providers will help make electric vehicles more affordable and accessible, while measures to transition a significant portion of the state’s public transportation fleet to vehicles electricity and the development of charging infrastructure will facilitate its adoption. Other Indian states are expected to follow Tamil Nadu’s example and take similar steps toward a greener, cleaner, and more sustainable future.
