In a much-awaited move, the Tamil Nadu government has issued an order notifying the extension of a 100 per cent motor vehicle tax exemption for electric vehicles to be registered in the State.

The exemption will be offered to the battery-operated vehicles registered between January 1, 2023, and December 31, 2025.

Faster adoption

The 100 per cent road tax exemption period for electric vehicles in the State ended on December 31, 2022, and the EV industry was urging the State government to extend the sops for some more years to drive faster adoption of battery electric vehicles as well as to support the EV ecosystem.

“As certain passenger vehicle manufacturers have requested an extension of 100 per cent tax exemption for a further period of three years to all the battery-operated vehicles, the government, after careful examination, has decided to grant 100 per cent tax exemption for all-electric vehicles, covered in both transport and non-transport categories,” said the order.

The Indian Charge Point Operators’ Association welcomes the decision of the Tamil Nadu government.

Steps for higher adoption

“This consumer-friendly step would enable higher adoption of EVs in the State. We would urge the State government to reconsider its decision of increasing the EV tariff, which is more than even the commercial tariff,” Awadhesh Jha, Chairman, Indian Charge Point Operators Association, told businessline.

A lower EV tariff would enable the proliferation of a wider public charging network, which is one of the major barriers to the adoption of EVs beyond the high upfront cost, which has been partially offset by a 100 per cent tax exemption, he added.

With the increasing adoption of electric vehicles in Tamil Nadu, close to 67,000 battery-operated vehicles, including 61,628 electric two-wheelers, were registered in the State in 2022, up from 30,000 plus units in 2021.