In a move aimed at accelerating electric vehicle adoption, the Tamil Nadu government has extended the 100 per cent road tax exemption for all battery-operated vehicles—across both transport and non-transport categories—by another two years, from January 1, 2026 to December 31, 2027.

The extension follows sustained representations from EV manufacturers and other industry stakeholders, who have urged the State to continue the incentive as adoption gathers pace.

According to a Government Order (GO) issued on December 29, the decision was taken after careful consideration. The order notes that EV penetration in Tamil Nadu has risen to around 7.8 per cent in 2025, reflecting steady momentum in the market.

“Certain vehicle manufacturers have represented to the State Government stating that EV adoption is gaining momentum, reaching approximately 7.8 per cent in 2025, representing a significant improvement in Tamil Nadu. They requested extension of the road tax exemption further for all categories of electric vehicles,” the GO said.

The order also states that the Transport Commissioner had recommended extending the full tax waiver for another two years, in line with the Tamil Nadu Electric Vehicle Policy, 2023. Accordingly, the government approved the exemption from January 1, 2026 to December 31, 2027.

In addition, the Transport Commissioner has been asked to submit a detailed assessment on the potential impact of levying tax on electric vehicles, taking into account practices followed by other States.

Industry experts had earlier told businessline that tax exemptions, along with other incentives, have played a crucial role in driving EV adoption in Tamil Nadu, and that extending these benefits is vital for sustaining growth in the sector.

Tamil Nadu first introduced road tax exemptions and related incentives under its Electric Vehicle Policy 2019. The initial waiver was valid until 2022 and was later extended for three more years.

“This decision makes EVs more affordable for people across the state and sends a strong signal of Tamil Nadu’s commitment to clean and sustainable mobility. We encourage citizens to make the most of this opportunity and consider switching to electric vehicles,” said Karthikeyan Palanisamy, Managing Director & Co-Founder, Zeon Electric Pvt. Ltd., and Director, Indian Charge Point Operators’ Association. He added that road tax forms a significant cost component, and the exemption is expected to improve affordability for buyers.

Thiru Srinivasan, Senior Advisor, EV Sector, FaMe TN, welcomed the extension but emphasized the need to strengthen supply-side measures. “Encouragement should be given to motor, cells, batteries, power electronics and controllers development and manufacturing, that too by the states and union,” he said.