At a time when India’s electric vehicle (EV) industry starts the new year with an optimism, it is a different scenario in Tamil Nadu.

The government’s absence of communication on the extension of sops for EVs is causing uncertainty and is affecting the sales of battery-powered vehicles in the state.

To boost demand for EVs, the Tamil Nadu government provided 100 per cent exemption on road tax for the vehicles registered in the State.

However, the State government is silent on the extension of sops for EVs even as the exemption period ended on December 31, 2022.

There is a concern that electric cars will be 10-15 per cent more expensive if the State government do not extend the incentive.

“The recent in hike power tariffs for charging stations and the absence of communication on the extension of road tax exemption for EVs are creating uncertainty in the EV industry and could derail the EV adoption in the State,” said KP Karthikeyan, CEO & Co-Founder, Zeon Electric Pvt Ltd, which currently operates more than 70 charging stations in south India with about 10,000 registered customers.

Though other States have started their EV journeies much earlier, Tamil Nadu has seen some acceleration recently.

The total EV registration in the State more than doubled to about 66,958 units in 2022 compared with around 30,000 units in 2021. Tamil Nadu is seen as an important market for electric vehicle producers with increasing adoption. However, the current ambiguity over sops has impacted the sales.

“We are unable to proceed with the registration process of electric cars due to prevailing uncertainty. Even RTOs have no clue and most of them await communication from the government,” said a dealer of an electric car company.

“Right now, there is a bit of ambiguity and everybody is kind of not knowing what is the way forward. We heard all RTOs have requested the State government for clarity and direction,” said an official of an electric two-wheeler firm.

However, according to a senior government official, the State government is considering the extension.

“The proposal to extend road tax exemption is under consideration by the government,” said the official on the condition of anonymity. .

It is learnt that the government is planning to release a revised EV policy to make Tamil Nadu as a leading State in EV adoption in the country.

In 2022, Tamil Nadu occupied the 5th position in terms of EV registrations.

Uttar Pradesh was the leading State with total registrations of 1,62,843 vehicles, followed by Maharashtra (1,35,998), Karnataka (95,858), and Gujarat (68,998), per data on Vahan Dashboard.