Sops, packages: How Tamil Nadu's Hosur sealed the EV deal

Two Bengaluru-based mobility platforms launching their big two-wheeler factories in Hosur has brought Tamil Nadu’s aggressive Electric Vehicle (EV) policy into sharp focus. To woo them, the government went beyond the policy-based incentives with deal-clinching “customised packages”.

“We wanted Tamil Nadu to be the leader in manufacturing electric bikes and scooters as well. The state is the leader in automobile manufacturing and we did not want to lose the tag of being the leaders in EV manufacturing as well,” a government source told DH.

Both the companies had also approached Karnataka, with their own EV policy. But the mature automobile supplier base in the Hosur-Krishnagiri belt, readily available land through a ‘land bank’ policy, fiscal sops and proximity to their Bengaluru base helped them opt for Tamil Nadu.

“We did not want to lose the two companies. Above all, we wanted to give maximum jobs to our people. We walked the extra mile, and that is how business deals are closed,” said another Tamil Nadu government source.

The sources informed that Ola had signed two Memoranda of Understanding (MoUs) with the government for two factories — one in Krishnagiri and the other in the nearby Dharmapuri district. The factory in Bargur in Dharmapuri is expected to transform the backward district.

In the 2020 budget, Chief Minister B S Yediyurappa had allocated Rs 10 crore to set up an EV and energy storage manufacturing cluster in Harohalli of Ramanagara taluk.

Auto analysts said the Ola-Ather switch to Tamil Nadu should now propel Karnataka to activate the cluster, to be established under the fifth stage of the Karnataka Industrial Area Development Board (KIADB).

EV industry watchers did not see this as a tussle between two states, but a huge opportunity to leverage the strength of Hosur’s traditional automobile ecosystem and Bengaluru’s IT prowess. Software integration is a critical feature of EVs, and this could drive a symbiotic partnership between the two hubs.

Besides, the already established auto supply chain is a cross-border corridor that extends from Krishnagiri in Tamil Nadu to Bommasandra in Karnataka. The emerging EV ecosystem would only add a new dimension, said analysts.