 "Good news for EV buyers: Tamil Nadu extends motor tax waiver till 2027")
The Tamil Nadu government has extended its 100 per cent motor vehicle tax exemption for electric vehicles (EVs) by two more years, offering continued cost relief to buyers and greater policy certainty to manufacturers. The exemption, applicable to all battery-operated vehicles, will now remain in force until December 31, 2027, according to a government notification shared by the state’s industries minister, TRB Rajaa, PTI reported.
The decision has been taken under the Tamil Nadu Motor Vehicles Taxation Act, 1974, and will apply to both transport and non-transport electric vehicles. The exemption period will run from January 1, 2026, to December 31, 2027, the notification said.
What the exemption means for EV buyers
Motor vehicle tax is a one-time or periodic levy paid at the time of vehicle registration and renewal, depending on the category. For EV buyers in Tamil Nadu, the continued exemption translates into a direct reduction in the upfront cost of purchasing an electric two-wheeler, car, or commercial EV.
Depending on the vehicle type and price, motor vehicle tax can add several tens of thousands of rupees to the on-road cost. The exemption therefore improves affordability at a time when EVs are still priced higher than comparable petrol or diesel models.
Policy push to support EV adoption
Sharing the notification on social media, Rajaa said the move reflects the state government’s commitment to supporting EV adoption, affordability, and manufacturing at scale. He noted that the decision, taken by Chief Minister MK Stalin, sends a clear and stable policy signal to both consumers and industry, even as global clean mobility investments face volatility, PTI reported.
Rajaa also pointed out that battery-operated vehicle adoption in Tamil Nadu reached 7.8 per cent in 2025. While this marks steady progress, he acknowledged that significant work remains, particularly in expanding charging infrastructure and greening the broader EV supply chain.
Implications for manufacturers and investors
For EV manufacturers, especially those with production facilities or planned investments in Tamil Nadu, the extension provides long-term visibility on demand-side incentives. Lower ownership costs can help sustain consumer interest, which in turn supports capacity expansion and local sourcing decisions.
Tamil Nadu has positioned itself as a key EV manufacturing hub, hosting facilities for electric two-wheelers, cars, and components. A stable tax policy is seen as critical for attracting fresh investments and scaling up production.
The road ahead
While the tax exemption lowers purchase costs, industry watchers note that wider EV adoption will also depend on factors such as charging availability, battery prices, and financing options. Still, by extending the exemption through 2027, Tamil Nadu has reinforced its intent to remain one of India’s more EV-friendly states, PTI said.