Tamil Nadu has become the second state in India to waive off road tax on EVs in a bid to promote their adoption. The state government passed an order for a 100 percent exemption of motor vehicle tax for battery operated vehicles for a two-year period – from November 1, 2020 till December 31, 2022. On October 11, Delhi became the first state to announce a waiver on road tax for battery-operated electric vehicles.
EVs in Tamil Nadu exempt from 4 percent road tax
Exemption valid until December 31, 2020
Price of EVs to reduce, which will promote quicker adoption of battery electric vehicles
Tamil Nadu, like Delhi, Maharashtra, Karnataka and a few other states, is a traditional automotive manufacturing hub. As the state is looking to transform itself into an EV manufacturing and ecosystem hub, this move is aimed in that direction.
On September 16, Tamil Nadu had announced its EV policy and was the first state to do so. The state government aims to build a comprehensive EV ecosystem for which it hopes to attract a cumulative investment of Rs 50,000 crore. Around 1,50,000 new jobs are expected to be created in the new ecosystem.
Commenting on the decision to exempt EVs from tax, Ravneet Singh Phokela, Chief Business Officer, Ather Energy, said, “The past few days have been great for the EV industry, with progressive policies continuing to come into play. The removal of the 4 percent road tax on EVs will significantly reduce upfront costs of the vehicles. This has also come at an opportune time for Ather as we begin deliveries of the Ather 450X in Chennai this Deepavali. With this announcement, owners of Chennai and Coimbatore will now save nearly Rs 6,900 when they purchase Ather scooters. This is a welcome move for the entire industry and will accelerate the shift to EVs.”
A number of e-mobility players like Ather Energy, the IIT-Madras incubated battery manufacturer Grinntech and m-Auto have already invested in the state. The government is also planning to set up an EV park. In September, Tamil Nadu had also announced a new electronics and hardware manufacturing policy.
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