The Karnataka government is considering a new electric vehicle policy for the next five years, while considering exempting all electric and strong hybrid vehicles under Rs 25 lakh from road tax, CNBC-TV18 reported on September 25 citing sources.

The state aims to attract investments of Rs 50,000 crore in clean mobility value chain by 2029, and is considering incentives to the extent of 50 percent of value of fixed assets, the report added.

New projects or expansion of projects can get Production-Linked Incentive (PLI) of one percent of turnover for a period of five years.

The state government is also looking at companies getting 15 percent-25 percent capital investment subsidy and stamp duty exemptions, according to the report.

The development comes at a time when Karnataka has lost to neighbouring Tamil Nadu on manufacturing plants of Bengaluru-based EV firms Ola and Ather, and is now charting plans to woo companies to set up operations in the state.

During the Moneycontrol Startup Conclave in Bengaluru in August, Karnataka IT-BT Minister Priyank Kharge had said: “The government is engaging more with companies, corporates, and industries. We learn from them and see how we can make our policies sharper than the rest. We provide them with land, subsidised power tariffs, water, etc. We are creating an entire ecosystem in terms of education, research and development, innovation, policy, and skills.”

Responding to a query on how Karnataka is losing EV manufacturing plants to neighbouring states, IT-BT Secretary Ekroop Caur had said: “I'm confident that with the new policies and the government's focus on creating industrial townships around Bengaluru, which are in high demand by tech-oriented industries requiring high-end skills, we will be able to attract these companies back to Karnataka.”