In a significant move to accelerate electric mobility, the Tamil Nadu government has announced a major extension of its tax incentive for electric vehicles. The state will continue to offer a complete exemption from motor vehicle tax for all battery-operated vehicles until the end of December 2027.
Policy Extension Reinforces Green Commitment
The decision, formalized under the Tamil Nadu Motor Vehicles Taxation Act, 1974, was shared by State Industries Minister TRB Rajaa. He stated that the move, approved by Chief Minister M K Stalin, underscores the government's steadfast commitment to supporting electric vehicle (EV) adoption, enhancing affordability, and encouraging large-scale manufacturing within the state.
"This shows how pro-industry our government is," Rajaa remarked. In a social media post on Tuesday, he elaborated, "Tamil Nadu has extended 100 per cent motor vehicle tax exemption for all electric vehicles till December 31, 2027, aligning with our deep-rooted sustainability focus."
Driving Adoption and Providing Certainty
The minister highlighted that the adoption rate of battery-operated vehicles in Tamil Nadu reached 7.8 per cent in 2025. While this indicates positive growth, Rajaa acknowledged that there is still considerable ground to cover, particularly in expanding the charging infrastructure network and greening the entire supply chain.
The extended policy serves a dual purpose. It reduces the upfront cost for consumers purchasing EVs, making them more competitive against conventional vehicles. Simultaneously, it provides long-term certainty to manufacturers and investors, allowing them to plan for production and expansion with a clear regulatory outlook.
"This policy reduces cost for consumers while giving manufacturers long-term certainty," Rajaa noted. "Even as global markets face volatility and pressure on clean mobility investments, Tamil Nadu keeps its signal clear and stable."
Legal Notification and Future Roadmap
The official notification, shared by the minister, states: "In exercise of the powers conferred by sub-clause (b) of clause (1) of section 20 of the Tamil Nadu Motor Vehicles Taxation Act,1974 (Tamil Nadu Act 13 of 1974), the Governor of Tamil Nadu hereby exempts all battery operated vehicles both transport and non-transport from payment of motor vehicle tax under that Act for a further period commencing on and from the January 1, 2026 and ending with the December 31, 2027."
This extension builds on the state's existing policy framework, which has already established Tamil Nadu as a leading hub for EV and component manufacturing. The continued tax exemption is expected to:
- Boost consumer confidence and accelerate EV sales.
- Attract further investments in the EV manufacturing ecosystem.
- Support the state's broader environmental and sustainability goals.
The government's clear and stable policy signal aims to solidify Tamil Nadu's position at the forefront of India's electric vehicle revolution, balancing industrial growth with ecological responsibility.
