As Tamil Nadu’s electric vehicle (EV) revolution gathers pace, industry stakeholders are urging the state government to extend the 100% road tax exemption for battery-powered vehicles — a move they say is critical to sustaining the state’s growing EV momentum.
Industry calls for policy continuity to boost EV growth
Under the Tamil Nadu Electric Vehicle Policy 2019, the state had granted a complete road tax exemption for all categories of electric vehicles — including two-wheelers, three-wheelers, passenger cars, buses, and commercial vehicles — until December 2022.
Responding to industry demand, the DMK government extended this benefit, offering a 100% motor vehicle tax exemption for EVs registered between January 1, 2023, and December 31, 2025. However, with the deadline approaching, key players in the EV ecosystem are now seeking a further extension of this incentive to maintain the sector’s growth trajectory.
According to stakeholders, removing or reducing the tax benefit could slow down consumer adoption and create viability challenges for charging infrastructure operators and related businesses — sectors that are still in their early growth phase.
ICPOA requests road tax exemption extension until 20% EV penetration
The Indian Charge Point Operators Association (ICPOA) has formally written to State Industries Minister T. R. B. Raaja, requesting that the road tax exemption be extended until Tamil Nadu achieves at least 20% EV adoption.
“Tamil Nadu’s EV adoption has traditionally lagged behind progressive states like Karnataka, Maharashtra, Delhi, and Kerala,” said Karthikeyan Palanisamy, Director, ICPOA. “Until 2024, the state’s adoption rate was below the national average. But in 2025, adoption reached approximately 7.8%, reflecting a strong upward trend and growing public acceptance of electric mobility.”
Tamil Nadu: A manufacturing leader, but adoption still catching up
Tamil Nadu is already recognized as a leading destination for EV manufacturing in India, with several global and domestic automakers setting up production bases in the state. However, industry experts emphasize that consumer adoption must accelerate to match this industrial leadership.
A senior executive from a leading electric three-wheeler manufacturer noted, “Tamil Nadu has built a strong manufacturing ecosystem, but consumer adoption still needs a push. Extending the tax exemption will help bridge that gap and ensure consistent policy support for the sector.”
Government response and next steps
V. Arun Roy, Industries Secretary, Government of Tamil Nadu, confirmed that the department has received a memorandum from the industry association seeking the extension.
“We have received the request, but no discussions have been held so far regarding an extension,” he said.
Industry leaders believe that extending the 100% road tax exemption beyond 2025 will not only accelerate EV adoption but also attract further investments in manufacturing, charging networks, and clean mobility infrastructure — reinforcing Tamil Nadu’s position as a national leader in sustainable transportation.
