Karnataka Plans Incentives for Clean Mobility Vehicles including Hybrids
Key Ideas
  • Karnataka plans to reduce levies and offer financial incentives for firms in the clean mobility sector, including significant cuts for hybrid vehicles.
  • Hybrid cars priced under Rs 25 lakh could see tax waiver and incentives of up to 25 percent for investments in EVs by stakeholders.
  • Incentives will range from 15-25 percent of investments in fixed assets for EVs, including for battery component makers and EV charging gear manufacturers.
  • The state aims to raise up to 6 billion dollars from new investments through the clean mobility policy, emphasizing clean energy adoption.
Karnataka is gearing up to incentivize the manufacturing and infrastructure development for electric vehicles (EVs) and clean mobility. Following Uttar Pradesh's tax waiver on hybrid cars, Karnataka is working on reducing levies and providing financial incentives to firms in the clean mobility sector, which includes significant reductions for hybrid vehicles. The state aims to eliminate road tax and registration charges for hybrid cars priced below Rs 25 lakh, compared to the current 13-18 percent tax rates. Additionally, incentives of up to 25 percent are planned for investments in EVs by stakeholders, aiming to boost 'clean mobility vehicle adoption.' The policy also extends to some hybrids and hydrogen-based vehicles. The incentives will vary from 15-25 percent of the investment made by companies in fixed assets for EVs, including land and machinery for new factories or expansions of existing ones. This incentive structure will also apply to battery component manufacturers and EV charging equipment producers, with the percentage varying based on the investment size and employment generated. The state government has a target to generate up to 6 billion dollars through new investments in the clean mobility sector, although specific details of the policy have not been disclosed publicly yet. Despite attempts, Reuters was unable to obtain an official response from the state's transport department. This move in Karnataka follows the successful tax waiver implementation in Uttar Pradesh, where a Toyota dealer reported a 50 percent increase in hybrid car sales. Karnataka's proactive approach towards promoting clean mobility and incentivizing investments signals a positive sentiment towards sustainable transportation solutions and the adoption of clean energy in the state.
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