Big Boost to Electric Mobility: Tamil Nadu Extends 100% EV Motor Tax Exemption Till December 2027

Key Highlights

• 100% EV tax exemption extended till December 31, 2027.

• Applies to all battery-operated EVs in Tamil Nadu.

• Covers both transport and non-transport vehicles.

• Effective from January 1, 2026.

• Supports EV adoption and manufacturing growth.

The Tamil Nadu government has extended the 100% motor vehicle tax exemption on electric vehicles (EVs) till December 31, 2027. This move aims to further promote electric mobility and support sustainable transportation across the state. The decision was announced by Industries Minister T.R.B. Rajaa and notified through a government order under the Tamil Nadu Motor Vehicles Taxation Act, 1974.

The extended exemption will be effective from January 1, 2026, to December 31, 2027, continuing the benefits that were earlier set to end in 2025.

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Vehicles Covered Under the Exemption

The tax waiver applies to all battery-operated electric vehicles registered in Tamil Nadu. This includes both transport and non-transport EVs, such as:

• Electric two-wheelers

• Electric private cars

• Electric three-wheeler auto-rickshaws

• Other battery-operated vehicles

By covering a wide range of vehicle categories, the policy ensures broader access to cost benefits for EV buyers.

Government’s Vision and EV Adoption Status

According to Minister T.R.B. Rajaa, the extension reflects the state government’s strong commitment to EV adoption, affordability, and large-scale manufacturing. The policy also aligns with Tamil Nadu’s long-term sustainability goals.

He highlighted that EV penetration in the state reached around 7.8% in 2025, showing growing acceptance of electric mobility. At the same time, he acknowledged key challenges such as the need for faster charging infrastructure expansion and the development of a greener supply chain.

Benefits for Consumers and Industry

The continued tax exemption reduces the upfront cost of EVs, making them more attractive to buyers. For manufacturers and investors, it provides policy stability and long-term clarity, supporting decisions related to capacity expansion and investment in the state.

Industry stakeholders had been urging the state government to extend fiscal incentives, especially as central-level EV purchase incentives have not been extended, making state support even more critical.

Impact on Tamil Nadu’s EV Ecosystem

By extending the tax waiver for two more years, Tamil Nadu strengthens its position as a pro-EV state. The policy enhances the state’s appeal as a manufacturing hub, supports the growth of e-mobility infrastructure, and ensures consistent incentives during the transition toward large-scale electric transportation adoption.

Overall, the decision is expected to play a key role in sustaining EV demand and accelerating Tamil Nadu’s journey toward cleaner mobility.

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CMV360 Says

The extension of 100% motor vehicle tax exemption for electric vehicles till December 2027 highlights Tamil Nadu’s strong push toward clean and sustainable mobility. By lowering EV purchase costs and offering long-term policy clarity, the state supports consumers, manufacturers, and investors alike. With EV adoption already growing, this decision is expected to strengthen the EV ecosystem, boost infrastructure development, and accelerate the transition to electric transportation.