Autobayng News Team
The industry sought a road tax exemption until the state achieves at least a 20 per cent EV adoption level.“>
In a major relief to the EV industry, the Tamil Nadu govt has decided to extend the road tax exemption for electric vehicles by a further two years and has issued an order to this effect.
The current DMK government had earlier extended the exemption benefit—which expired on Dec 31, 2022—until Dec 31, 2025.
With EV adoption in Tamil Nadu remaining relatively low, players in the EV ecosystem had appealed to the state govt to extend the exemption further, noting that the absence of such incentives could discourage potential buyers and create viability challenges for charging operators and related businesses. The industry sought a road tax exemption until the state achieves at least a 20 per cent EV adoption level.“This decision to further extend the 100 per cent motor vehicle tax exemption on EVs until Dec 31, 2027, will make EVs more affordable for people across the state and sends a strong signal of Tamil Nadu’s commitment to clean and sustainable mobility. The move will also encourage people to make the most of this opportunity and consider switching to EVs,” said Karthikeyan Palanisamy, director, Indian Charge Point Operators Association (ICPOA), and managing director & co-founder, Zeon Electric.Although EV penetration in the two-wheeler and passenger vehicle (PV) segments in Tamil Nadu increased in 2025 compared with 2024, it remains in single digits.With the state government extending the exemption benefits, industry players say the move will accelerate adoption, as many concerns around EVs are receding and consumers are increasingly opting for battery-powered vehicles.“The extended road tax waiver is very welcome, especially since the demand-side incentive from the Union government is expected not to be extended. However, there should be a greater focus on supply-side initiatives,” said Thiru Srinivasan, senior advisor (EV Sector), FaMe TN – Department of MSME, govt of Tamil Nadu.
The extension of sops is also expected to benefit new EV players such as VinFast, which has set up a factory in Tamil Nadu, and has been aggressively opening dealership outlets in major towns.
“VinFast has shown signs of early traction, with its electric car sales in November nearly doubling on a month-on-month basis. Cumulatively, the company sold 428 units during these three months. Within just three months of market entry, it has established a footprint of 27 dealership outlets and 84 service centres across multiple cities—a faster rollout than other new entrants,” according to JMK Research.
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