Tamil Nadu Extends 100 percent EV Road Tax Exemption Until 2027

Tamil Nadu government has extended its 100 per cent road tax exemption for all battery operated vehicles by two years - from January 1, 2026, to December 31, 2027. The decision, announced through a government order issued on December 29, aims to sustain the state’s momentum in promoting clean mobility and supporting local EV manufacturing.

Tamil Nadu’s EV Policy Journey

The road tax waiver was first introduced under the Tamil Nadu Electric Vehicle Policy, 2019, as part of a comprehensive plan to make the state a leading EV hub. Initially valid until December 31, 2022, the exemption was extended until 2025 and has now been renewed for another two years.

According to the government order, the extension aligns with the Tamil Nadu Electric Vehicle Policy, 2023, following recommendations from the Transport Commissioner and industry stakeholders. The Commissioner has also been directed to submit a detailed analysis of the potential impact of imposing taxes on electric vehicles, keeping in view the practices followed in other Indian states.

Notably, the road tax forms a significant portion of a vehicle’s upfront cost. For EVs, the removal of this component reduces the financial burden on buyers, especially in the two-wheeler and compact car categories, which form the bulk of Tamil Nadu’s EV market.

EV Adoption Trends in Tamil Nadu

Tamil Nadu’s EV adoption has grown steadily, with industry estimates pegging the penetration rate at around 7.8 per cent in 2025. Growth has been stronger in electric two-wheelers, delivery fleets, and commercial categories, while passenger car adoption remains relatively slower. Last year, the state registered a total of 1.66 lakh EV sales across all segments.