Now EVs are becoming more affordable than they were before, thanks to the slashing of road tax!

In a major push to accelerate electric vehicle (EV) adoption, the Gujarat government has slashed the road tax on EVs from 6% to just 1%. This reduced rate will remain effective till March 31, 2026, offering significant financial relief to potential EV buyers across the state.

Massive Tax Savings for EV Buyers

The revised policy enables buyers to save up to Rs. 1 lakh, depending on the vehicle’s price. For instance, an EV priced at Rs.15.50 lakh like the MG Windsor EV Essence variant, which earlier attracted Rs. 93,000 in tax, will now only be taxed Rs. 15,500—translating into a saving of Rs, 77,500.

For electric two-wheelers, the road tax savings can range between Rs. 5,000 to Rs. 10,000, depending on the base price. A Rs. 10 lakh EV that earlier incurred Rs. 60,000 as road tax will now attract just Rs. 10,000, resulting in a direct saving of Rs. 50,000.

Online Registration via Vahan Portal Mandatory

To avail of the reduced tax benefit, buyers must register their EVs through the Vahan 4.0 portal. The entire process is digitised, eliminating the need to visit the RTO physically. However, it’s important to note that hybrid vehicles (mild and strong) are not eligible under this scheme.

State Responds to Declining EV Sales

This move comes in response to a steep decline in EV sales, which dropped by 43.5% in 2024—from 88,614 units in 2023 to 50,010 units in 2024. Experts attribute this drop to the earlier withdrawal of state subsidies, which included Rs. 25,000 for two-wheelers and Rs. 1.5 lakh for EVs priced under Rs. 15 lakh.

To counter this, the Gujarat government aims to revive demand, protect the environment, and support sectors like tourism that benefit from sustainable mobility solutions.

Gujarat Sets an Example for Other States

Industry analysts view this step as forward-thinking and environmentally responsible. By lowering the entry cost for electric vehicles, Gujarat is promoting green mobility and contributing to India’s carbon emission reduction goals.

This policy could potentially influence other Indian states to follow suit, encouraging a nationwide shift towards more EV-friendly taxation and infrastructure.