Tamil Nadu extends 100% road tax exemption for EVs until 2027

electric car model
| Photo Credit:
wakila

In a boost to electric vehicles adoption, the Tamil Nadu government has extended by two years – from January 1, 2026 to December 31, 2027 – the 100 per cent tax exemption granted for all Battery-Operated Vehicles (Electric Vehicles) covered in all Transport and Non-Transport vehicles.

This has been a strong request from EV manufacturers and other industry stakeholders to the State government.

The Government, after careful examination, has decided to grant 100 per cent tax exemption for all Battery-Operated Vehicles (Electric Vehicles) for two years starting January 1, 2026, says a Government Order issued on December 29.

“Certain vehicle manufacturers have represented to the State Government stating that EV adoption is gaining momentum, reaching approximately 7.8 per cent in 2025, representing a significant improvement in Tamil Nadu. They requested extension of the road tax exemption further for all categories of electric vehicles,” the GO said.

Further, the Transport Commissioner also requested the Government to consider and issue orders by extending 100 per cent tax exemption for all Battery-Operated Vehicles for a further period of two years from January 1, 2026 to December 31, 2027 by complying with the Tamil Nadu Electric Vehicle Policy, 2023, the GO adds.

The Transport Commissioner is also directed to submit a detailed analysis on the potential impact of imposing tax on electric vehicles, in alignment with the practices of other States in India, says the order.

EV industry experts earlier told businessline that tax exemptions, along with other incentives, have significantly bolstered EV adoption in TN, and a further extension is critical for the continued development of the state’s ecosystem.

The state introduced road tax exemption, along with other benefits, for the EV industry under its Tamil Nadu Electric Vehicle Policy 2019. Initially, exemption was granted until 2022, and it was later extended for three years. 

“This decision makes EVs more affordable for people across the state and sends a strong signal of Tamil Nadu’s commitment to clean and sustainable mobility. We encourage citizens to make the most of this opportunity and consider switching to electric vehicles,” Karthikeyan Palanisamy, Managing Director & Co-Founder, Zeon Electric Pvt. Ltd., and Director, Indian Charge Point Operators’ Association, said. The road tax is a considerable portion, and this is expected to make EVs affordable for the state’s buyers, he added.

Thiru Srinivasan, Senior Advisor, EV Sector, FaMe TN, said the extended road tax waiver is welcome, but the bigger focus should be on supply side initiatives to ensure local supply of critical components and materials. “Encouragement should be given to motor, cells, batteries, power electronics and controllers development and manufacturing, that too by the states and union,” he said.

Published on December 30, 2025