Electric vehicle charging infrastructure investors eagerly await the implementation of power tariff rates mentioned in the Tamil Nadu Electric Vehicle Policy 2023, for public charging stations in the state.

A revision in rates will not only help attract investment in establishing more public charging stations in Tamil Nadu, but will also help the state accelerate EV adoption, EV industry stakeholders said.

Though Tamil Nadu, the second wealthiest state, remains a favoured destination for electric vehicle and automotive manufacturing investments, it lags behind Maharashtra, Delhi, Karnataka, Kerala, and Gujarat in electric car penetration .

According to data on the Vahan portal, between January 2021 and now, Maharashtra sold more than 21,300 units of electric cars, followed by Delhi (11,500 plus), Karnataka (10,200 plus), Kerala (9,400 plus) and Gujarat (6,100 plus). However, Tamil Nadu has reported a total registration of 5,600 plus e-cars only.

A major reason cited for the poor e-car penetration in Tamil Nadu is the lack of adequate public charging stations and a major barrier to the proliferation of public charging stations is the high energy cost of operating the same.

Public charging stations in states such as Karnataka, Kerala, Maharashtra, and Delhi are given power at industrial rates or lower, with zero to minimal fixed charges. This has made the operation of PCS viable in these states, which has attracted a large number of small and big private operators to set up charging units. This has, in turn, led to a surge in electric car sales in those states.

However, charging stations in Tamil Nadu are levied commercial power tariffs, with high fixed charges for the power supplied from the grid. Higher energy tariffs, coupled with low levels of utilisation have posed viability challenges for charging operators in the state and have curtailed further investments.

“The situation was further exacerbated when commercial tariffs along with fixed charges were revised upwards in September 2022. This has halted the proliferation of PCS in the state. Also, we had to hold our investments in the expansion of charging stations in the state. It is financially unviable to operate PCS at these tariff rates,” said K P Karthikeyan, CEO & Co-Founder, Zeon Electric Pvt Ltd, a leading EV charging operator in South India.

However, the state government took notice of the same after representations from industry players and indicated its intent to revise the tariff in the EV policy that was announced in February this year. The policy specifically mentions the reduction of tariffs during off-peak hours, and the reduction of fixed charges for PCS for the next two years. However, it has been five months since the announcement was made and the is industry still waiting for the implementation.

“A couple of weeks ago, I flagged this issue with State Government Officials at an investors’ meeting and reminded them about the promise made in the EV policy. Currently, the power tariff for PCS is very high and if the Tamil Nadu government wants to promote EV adoption, charging at PCS should be affordable for end-consumers. I am sure the state government is working on it,” said Awadhesh Jha, Chairman, Indian Charge Point Operators’ Association.

Meanwhile, it is gathered that the state government has todirect TNERC to reset tariffs for charging stations. “It is under progress and the tariff revision is likely to get approval soon,” said Rajesh Lakhoni, Chairman & Managing Director, TANGEDCO.

A consumer perception survey conducted by Climate Trends and Clean Mobility Shift a few months ago revealed that EVs had a high appeal among both private users and commercial fleet owners in Tamil Nadu. But lack of charging infrastructure was reported to be a major hurdle to adoption.

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