Tamil Nadu grants two-year tax exemption to EVs

State governments across the country are laying out the red carpet for the electric mobility industry. After Delhi waived off road tax on all battery operated electric vehicles on October 11, Tamil Nadu is the next state to do so.

To encourage adoption of electric vehicles, yesterday the Tamil Nadu state government passed an order for 100 % exemption of motor vehicle tax for battery operated vehicles for a two-year period – from November 1, 2020 till December 31, 2022.

Tamil Nadu, like Delhi, Maharashtra, Karnataka and a few other states, which is a traditional automotive manufacturing hub, is looking to transform itself into an EV manufacturing and eco-system 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 150,000 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% 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 the a new electronics and hardware manufacturing policy.

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