In a major policy shift, the Karnataka government has decided to introduce a lifetime road tax on electric vehicles (EVs), including electric cars, by withdrawing the tax exemptions that were earlier in place. The move is expected to increase the cost of owning an electric car in the state.
Under the new rules, electric two-wheelers will continue to remain exempt from road tax, offering some relief to buyers in that segment. However, electric cars and other larger EVs will now attract a one-time tax at the time of registration.
The tax will depend on the price of the vehicle. Electric cars priced up to ₹10 lakh are likely to be taxed at around 5%, those between ₹10 lakh and ₹25 lakh may face an 8% tax, and vehicles above ₹25 lakh could attract up to 10%. This means buyers will have to pay more upfront when purchasing an electric car.
The decision marks a change in Karnataka’s earlier approach, where incentives and tax exemptions were used to encourage people to switch to cleaner, electric mobility. The state had been considered one of the early supporters of EV adoption in India.
While the government is expected to gain additional revenue from this move, the decision has raised concerns among industry experts and buyers. Many believe that higher costs could discourage people from choosing electric cars, especially at a time when the shift to greener transport is being actively promoted.
At the same time, keeping tax exemptions for electric two-wheelers suggests that the government still wants to support more affordable and widely used EV options. Two-wheelers make up a large share of vehicle sales, and this relief could help maintain momentum in that segment.
The decision has also sparked debate, with some questioning whether reducing incentives for electric cars could slow down the transition to environmentally friendly vehicles.
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