In a significant push towards green mobility, the Kerala government has announced revised road tax rates for electric vehicles (EVs) as part of the revised State Budget presented on June 18, 2026. The changes aim to make EVs more affordable, especially in the popular mid-range segment
The revised structure offers notable relief for buyers of electric cars:
- EVs priced up to ₹10 lakh: Road tax reduced from 5% to 3%.
- EVs priced between ₹15 lakh and ₹20 lakh: Road tax slashed from 8% to 5% — a 3 percentage point reduction.
This cut in the ₹15–20 lakh segment is expected to deliver savings of up to ₹60,000 per vehicle, making popular electric models significantly more attractive for Kerala buyers.
thehindu.comOther slabs remain unchanged, except for a hike on luxury EVs:
- EVs priced above ₹40 lakh: Road tax increased from 10% to 15%.
The tax revisions form part of the government’s broader strategy to promote electric mobility while supporting public transport. Chief Minister V D Satheesan, who presented the revised budget, highlighted measures aimed at easing the financial burden on citizens and accelerating the shift to sustainable transportation.
These incentives are likely to benefit a wide range of electric cars in the affordable and mid-premium segments, including models from Tata, MG, Hyundai, and emerging Indian EV brands.
Along with EV tax relief, the budget includes:
- Significant reductions in quarterly taxes for All India Tourist Permit (AITP) buses to encourage registrations in Kerala.
- Amnesty schemes for tax arrears, flood cess, and e-challans.
- Increased exemption limit for motor vehicle tax for persons with disabilities.
Kerala has been one of the more progressive states in EV adoption. These targeted road tax cuts are expected to further accelerate demand, particularly for family-oriented electric SUVs and sedans in the ₹10–20 lakh price range.
Buyers planning to purchase an EV should consult authorised dealers for exact calculations, as road tax is applied on the on-road price (including ex-showroom and other charges).The revised rates are expected to take effect soon. EV enthusiasts and potential buyers in Kerala have welcomed the move as a timely and practical step towards achieving the state’s green mobility goals.
