EV boost: Govt scraps tax on electric vehicles till 2027 in New Year's gift

New Delhi (The Uttam Hindu) : Tamil Nadu is once again among the leading states in the country when it comes to electric vehicles (EVs). In a significant decision, the state government has extended the 100% motor vehicle tax exemption on all types of electric vehicles until December 31, 2027. This previously applicable exemption will now continue for an even longer period.

This decision will not only make purchasing an EV cheaper, but will also provide assurances of a clear and stable policy for manufacturing, investment, and industry. The Tamil Nadu government has made it clear that it will not back down on electric mobility.

Complete tax exemption from 2026 to 2027

According to a government notification, all battery-operated vehicles in the state—whether in the transport or non-transport category—will be completely exempt from motor vehicle tax from January 1, 2026, to December 31, 2027. This decision has been taken under the Tamil Nadu Motor Vehicles Taxation Act, 1974. The notification also clarifies that the definition of battery-operated vehicle will be the same as given in the Central Motor Vehicles Rules, 1989.

Not only private, but commercial EVs will also benefit

The unique feature of this policy is that the tax exemption isn't limited to private electric vehicles. EVs used in taxis, buses, and other commercial and public transportation will also be able to take advantage of this 100% tax exemption.

Chief Minister Stalin's thinking behind the EV policy

This decision is being linked to Chief Minister M.K. Stalin's long-term vision regarding EVs. The state government believes that the tax exemption will reduce the initial cost of electric vehicles, which will encourage more people to move from petrol-diesel to electric alternatives. This will not only reduce fuel dependence but will also strengthen environmental protection. According to government data, the share of EVs in Tamil Nadu has reached around 7.8% by 2025. However, both the government and the industry believe that the charging infrastructure and supply chain still need to be strengthened.

This decision is considered significant for the EV industry because it sends a clear message of policy stability. The long-term tax exemption will allow companies to plan their investments and manufacturing with greater confidence. This will increase employment

opportunities in the state and further strengthen Tamil Nadu's position as an EV manufacturing hub. At a time when global uncertainty persists regarding clean mobility investments, Tamil Nadu's move stands out and is strong. The decision to exempt EV buyers from 100% motor vehicle tax until 2027 could prove beneficial for all three—EV buyers, the industry, and the environment. This is not just a tax relief, but a clear signal that Tamil Nadu is fully prepared for an electric future.