In a significant move to promote electric vehicle (EV) adoption, the Gujarat government has reduced the road tax on EVs from 6% to just 1%. This change, announced in the 2025–2026 state budget, aims to make EVs more affordable and encourage sustainable transportation.
The tax reduction translates to savings ranging from ₹30,000 to ₹1 lakh, depending on the vehicle’s price. For instance, a ₹10 lakh EV, which previously incurred ₹60,000 in taxes, will now attract only ₹10,000, offering a flat saving of ₹50,000. This initiative is valid until March 31, 2026.
The policy change comes at a crucial time, as EV sales in Gujarat had declined by over 50% following the cessation of state subsidies a year ago. The new tax structure is expected to rejuvenate the EV market by providing financial relief to consumers.
To ensure transparency and streamline the registration process, the tax benefit is applicable only to vehicles registered online through the Vahan 4.0 portal. This move aligns with the government’s digitalization efforts and aims to simplify the registration procedure for EV buyers.
Industry experts view this policy shift as a progressive step towards achieving India’s carbon reduction goals. By making EVs more accessible, Gujarat is not only promoting green mobility but also contributing to the broader objective of reducing greenhouse gas emissions.
The Gujarat government’s decision is anticipated to set a precedent for other states, potentially leading to nationwide policy changes that favor electric vehicles. As the nation moves towards a more sustainable future, such initiatives play a pivotal role in accelerating the transition to electric mobility.
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