Ola was in talks with Karnataka as well but Tamil Nadu, people aware of the developments said, had offered a 'better deal'
The Karnataka government on Monday approved three big-ticket EV projects by relatively unknown firms, totalling ₹22,419 crore
Bengaluru-headquartered Ola’s recent announcement to set up its ambitious ₹2400 crore, two-million units per annum electric vehicle (EV) plant in neighbouring Tamil Nadu has left Karnataka out in the cold.
Ola was in talks with Karnataka as well but Tamil Nadu, people aware of the developments said, had offered a “better deal".
"There were multiple reasons why Tamil Nadu was chosen. One reason is that subsidies and the supply ecosystem is much better than in Karnataka," said one person, asking not to be named.
A second person said that Tamil Nadu offered a larger land parcel that has space for other stakeholders like suppliers to also set up shop near the soon-to-be ready factory.
The proximity to the port is another advantage for the company that is looking to ship its products to other global markets, he added.
Ola has only signed a part of the deal and is yet to finalize on its total requirement of around 150 acres, the first person said.
Karnataka launched its EV policy in 2017 to capture a large slice of India’s green vehicular tech transition. However, poor implementation of its own stated objectives, delays in approvals, corruption and land availability among other factors has led it to play catch up with neighbouring states.
“The government has been talking to such companies including Ola to invest in the state," Jagadish Shettar, Karnataka’s minister for large industries said.
While the policy outlines ambitious goals including one charging station in a three-kilometer radius within Bengaluru, private firms are left to build the EV infrastructure themselves.
Sun Mobility, a private EV battery solutions provider, recently said it will roll out 100 battery swap stations in Bengaluru to help better adoption of green vehicle technology in India’s technology capital.
Mahindra Electric, Ather Energy and Ampere among other EV players operate out of Karnataka.
The Congress party, the principal political opposition in Karnataka, has accused the government for not being dynamic enough and preventing investors from coming in.
The Karnataka government on Monday approved three big-ticket EV projects by relatively unknown firms, totalling ₹22,419 crore. They include a project by Hyunet Pvt Ltd in Chikkaballapura and two projects by Elest Private Limited run by promoters of Rajesh Exports, a Bengaluru-headquartered company that is into retail, wholesale and export of gold and other jewellery.
Elest has been granted a total of over 170 acres of land in Hubballi to produce EVs, lithium ion cells and battery manufacturing and has the potential to generate over 2600 jobs, according to the state government.
“We are building one of the largest integrated EV manufacturing plants and will produce everything from two wheelers to trucks. We are planning to roll out our two-wheelers as the first offering by 2022. We have been working on EVs for about five years, acquired some technology from Europe, accumulated enough expertise and are talking to multiple partners for supply of battery technology," said Rajesh Mehta, the executive chairman of Rajesh Exports and main promoter of Elest.
He said that the company will raise money from a combination of debt, equity and internal investments. Karnataka has a habit of making grand announcements on investments and job creation but often rely on terms like “in progress" to hide if these investments were realised on ground.
Delays in land allotment alone has derailed conversion of proposals of over ₹39,000 crore and over 80,000 jobs between 2013 and 2019, recently Mint reported.
To ensure speedy clearances, the Yediyurappa government launched the Affidavit Based Clearance system, that is part of an amendment made to the state's facilitation act, to enable investors to establish their businesses without any clearances/approvals from various departments for the first three years.
“At a vision level, the government is doing the right things, the policies are very positive overall. But there is a gap between vision and implementation. Like GST for EV was reduced to 5% but on batteries and charging or swapping, is at 18%. There needs to be greater integration at the policy level from the centre down to the states. The vision is right and it is very important that the operating guidelines are very clear for people to start to invest in EVs," Chetan Maini, co-founder and vice-chairman of Sun Mobility said in a recent interview.