Bajaj's EV manufacturing plant: Karnataka frontrunner after rift with Maharashtra

Karnataka is in talks with Bajaj Auto to host the two-wheeler giant's next electric-vehicle manufacturing plant, a direct fallout of a deepening rift between the company and the Maharashtra government over pending subsidy. It is learnt that Karnataka has emerged as the frontrunner, ahead of Tamil Nadu, which has also been approached, after the company decided to move out of Maharashtra.

Sources told The Federal that discussions are underway at the ministerial level, with Karnataka offering attractive incentives, land, and infrastructure support.

Karnataka's EV push

Karnataka, to its credit, has launched a Clean Mobility Policy in February 2025, targeting Rs 50,000 crore in investment and 1 lakh new jobs in the clean mobility sector by 2030. EVs and hybrids priced below Rs 25 lakh enjoy 100 per cent exemption from road tax and registration fees. The state already has around 6,000 charging stations and plans to add over 1,500 fast-charging stations under the Centre's PM e-Drive Scheme.

Serious blow to Maharashtra

Maharashtra owes Bajaj Auto approximately Rs 75 crore in pending subsidies, which the state's transport department is yet to release. More damaging, the government recently imposed a sudden freeze on new auto-rickshaw permits, citing market saturation. For Bajaj, which commands an 87 per cent share of Maharashtra's three-wheeler market and derives 15-17 per cent of its total three-wheeler sales from the state, the move dealt a serious blow.

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Bajaj Auto MD Rajiv Bajaj didn't hold back. He publicly called Maharashtra's EV policy a "major failure" — the worst he had witnessed in his 36-year career.

Through its subsidiary Chetak Technology Limited, Bajaj has already sunk roughly Rs 750 crore into an EV facility at its Akurdi plant in Pune. Component suppliers have added another Rs 250 crore, with Rs 420 crore more earmarked for the EV sector. If new investment flows to Karnataka instead, Maharashtra's local supplier ecosystem could take a significant hit.

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The Maharashtra government has played down the situation. Industry Secretary P Anbalagan described it as a minor budgetary matter and said the government would work to resolve the dispute.