The Tamil Nadu government has extended its full road tax exemption for electric vehicles for another two years, giving a fresh push to electric mobility in the state. The exemption, which was scheduled to end on January 1, 2026, will now continue until December 31, 2027. The decision was announced through a government order issued on December 29, offering relief and clarity to EV buyers and manufacturers alike.
The tax exemption applies to all battery-operated electric vehicles, covering both transport vehicles such as electric buses, taxis, and goods carriers, as well as non-transport vehicles like private electric cars and two-wheelers. Officials said the extension reflects the state government’s intention to keep the pace of EV adoption steady while supporting long-term environmental goals.
The move comes after continuous requests from EV manufacturers and industry associations, who highlighted the importance of fiscal incentives in a market that is still evolving. As per the inputs mentioned in the government order, Tamil Nadu’s share in India’s electric vehicle market reached nearly 7.8 per cent in 2025, showing consistent growth over the years. Industry players believe that continuing tax exemptions across all EV segments is essential to maintain this momentum and make electric vehicles more affordable for consumers.
The Transport Commissioner also supported the proposal, noting that the exemption aligns with the objectives of the Tamil Nadu Electric Vehicle Policy 2023. The policy focuses on increasing EV adoption, encouraging local manufacturing, and creating a strong charging infrastructure across the state.
At the same time, the government has asked concerned departments to carry out a detailed study on the possible introduction of road tax for electric vehicles in the future. This review will look at how other Indian states are handling EV taxation and assess the financial, environmental, and market impact before any new decision is taken.
Tamil Nadu first introduced the road tax exemption under its Electric Vehicle Policy 2019 as part of a wider incentive package to build a strong EV ecosystem. The benefit was initially valid until 2022 and was later extended for three more years. The latest two-year extension highlights the government’s effort to balance future revenue needs with clean energy goals, while offering short-term policy stability to EV users and the industry.
