The Government of Karnataka has introduced its Clean Mobility Policy 2025-30, targeting ₹500 billion (~$5.755 billion) investments across the clean mobility value chain by 2030.

The policy targets establishing Karnataka as Asia’s leading hub for clean mobility through equitable and sustainable development, providing electric vehicle (EV) charging infrastructure, and fostering innovation in EV and hydrogen fuel cell technologies.

The policy will be effective from February 11, 2025, for five years.

The key features of the policy include:

Regulatory Exemptions for EVs

• Exempting all categories of EVs, including transport and non-transport vehicles, from road tax and registration charges, except motor cars, jeeps, omnibuses, and private service vehicles priced above ₹2.5 million (~$28,775).
• A 100% exemption on stamp duty and registration charges for loan agreements, leases, and land purchases under the Karnataka Land Reforms Act Reimbursements will be available until the Karnataka Stamp Act is amended.
• A 100% reimbursement of land conversation fees for converting agricultural land to industrial use to make establishing operations in the clean mobility sector easier.

EV Manufacturing and R&D

The policy covers the entire EV manufacturing value chain, including assembly, battery pack production, hydrogen fuel cells, battery recycling centers, and vehicle testing facilities. Clean mobility clusters will be established in Gauribidanur, Dharwad, and Harohalli, spanning over 2,500 acres, offering ready-to-occupy land, built factories, incubation facilities, and testing labs.

The state will also provide 30% reimbursement of research and development costs up to ₹10 million (~$115,100) for enterprises that meet global benchmarks, encouraging innovation in clean mobility solutions.

Capital Subsidies for Industries

The policy offers capital subsidies across different industry scales to support investments:

• Micro industries are eligible for 20% to 35% of the Value of Fixed Assets (VFA) capped at ₹3.5 million (~$40,285).
• Small industries will receive 20% to 30% subsidies on VFA capped at ₹22.5 million (~$258,976), and medium industries will receive 20% to 25% up to ₹100 million (~$1.151 million).
• Large, mega, and ultra-mega enterprises are eligible for 20% to 25% subsidies on VFA for up to 50 acres, disbursed over five years, along with subsidies for effluent treatment plants at 50% of the cost, capped at ₹25 million (~$287,750).

Parking and Fleet Conversion Incentives

The policy mandates reserving a percentage of on-street and off-street parking in cities for clean-fuel vehicles. It also offers incentives for retrofitting existing two-wheelers, three-wheelers, and four-wheelers with clean fuel technology.

The policy encourages e-commerce, delivery services, private companies, and educational institutions to convert vehicle fleets to electric or hydrogen-powered by 2030.

EV Charging Infrastructure

Karnataka’s 2024-25 state budget allocated ₹350 million (~$4.0285 million) to establish 2,500 new charging stations under the public-private partnership model, and 100 stations developed by electricity supply companies.

Fast charging stations will be installed every 50 km on the highways such as Bengaluru-Pune and Bengaluru-Mysuru. Bangalore Electricity Supply Company will work with apartment associations and public transport agencies to install charging points in residential and public parking spaces to ensure greater access to charging facilities.

Charging and Battery Swapping Stations

The policy introduced the following incentives for setting up charging and battery-swapping stations:

• Fast charging stations will receive a 25% capital subsidy of up to ₹1 million (~$11,510) for the first 500 stations.
• Battery-swapping stations will receive a 25% subsidy with caps set at ₹300,000 (~$3,453) for two-wheeler stations, ₹500,000 (~$5,755) for car stations, and ₹1 million (~$11,510) for bus stations.
• Hydrogen refueling will receive a 25% subsidy up to ₹10 million (~$115,100) for the first 25 stations established under the policy.

EV sales in India reached a record 1.95 million units in 2024, an over 27% growth year-over-year against the 1.53 million units sold in 2023. EVs accounted for 3.6% of overall automobile sales

In August 2024, the Karnataka Electricity Regulatory Commission issued guidelines for EV users in Karnataka to get approvals from distribution licensees to install chargers in non-designated areas.

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