Karnataka's Clean Mobility Policy a welcome start, but long road ahead: Industry

Bengaluru: Following the latest Union Budget exempting basic customs duties on lithium-ion battery components, the Karnataka government launched its Clean Mobility Policy during the Global Investors Meet earlier this month.

After being the first state in India to launch an EV policy, it is now at the forefront of a wider policy on clean mobility - something that industry players believe other states will follow.

The two policies are very different, according to company executives in the space. Whether it is the fact that clusters have already been identified or a push to local manufacturing by aiming for Rs 50,000 crore in investment and the creation of one lakh jobs, players are excited by the prospects. They call this an ecosystem approach, or one that moves beyond EVs to also provide capital subsidies and battery-swapping networks.

“The policy will definitely create a push in terms of investments, as previously seen with states like Tamil Nadu,” said Arti Roy, Associate Director, CareEdge Ratings.

It even moves a step forward from other such policies by encouraging other powertrains, like hydrogen or biofuels.

“Across India, we have seen a growing trend of a hybrid model (like EV plus petrol or CNG) instead of EVs because that takes care of whatever charging concerns or range anxiety is there. When it comes to hydrogen, everyone is discussing it but nobody is able to intercept how India will be able to move on it. Fuels like hydrogen are still at a very, very nascent stage,” Roy said.

The key now is for industry players to collaborate on the vision, whether it is manufacturing locally or exporting products.

Further clarity needed

Policy execution is also critical, but players are not clear on the roadmap.

"Industry players like us require a clearer roadmap, including implementation frameworks and incentive structures, to align investments accordingly," pointed out Anagh Ojha, Co-founder and CTO, Urja Mobility.

On subsidies, Maxson Lewis, Founder and CEO, Magenta Mobility, pointed out that most of this will be consumed by the larger players, while smaller companies which may be doing core work in research and development (R&D), may get left behind.

Roy agreed, saying that there is a gap in clarity as previously seen with PLIs, which only ended up covering larger players. How the subsidies will work, is yet to be described.

Experts agree that the focus on EV incentives and infra will go miles in addressing range anxiety, which has consistently been a key issue in clean mobility. Now, the wait is for this planned infra to come up. For this, it is essential for companies also to make efforts, including collaborations with foreign companies, as per players.

“Currently, there are multiple charging operators in India. For an EV user, this means there is a problem of having to own and operate multiple charging apps. There is a variation in the rate across this multiple charging infrastructure,” said Lewis, pointing to a pending requirement of greater convergence and ease.

“For the policy’s success, we must go beyond just charging infrastructure. A robust ecosystem for Battery-as-a-Service (BaaS) and EV leasing is essential to ensure high uptime for fleets and commercial EV users. Battery swapping hubs, smart energy storage solutions, and streamlined financing models will play a key role in driving large-scale EV adoption in Karnataka," said Ojha.

Several players agreed that R&D could have seen greater incentives in the policy. This is especially for research specifically on critical components such as cells and motors, as the current policy is open-ended on this front.

“While the exemption of road tax for hybrids (under Rs 25 Lakhs) is a welcome move, extending similar benefits to EVs would have further accelerated adoption and affordability for end-consumers,” said Dev Arora, Founder & CEO at Alt Mobility.