Maharashtra to impose additional tax on premium EVs | Fusion - WeRIndia

In a move that could impact high-end electric vehicles (EVs), the Maharashtra government has announced an additional 6% tax on EVs priced above ₹30 lakh (ex-showroom).

This decision, part of the state budget for 2025-26, will take effect from April 1, 2025.

Currently, EVs in India are taxed at 5% GST, significantly lower than the 28% GST applied to conventional fuel-powered vehicles.

However, with this new tax, the cost of premium EVs in Maharashtra is set to rise, potentially affecting demand.

Despite increasing interest, EV adoption in India remains limited. According to FADA (Federation of Automobile Dealers Associations), electric cars made up only 3% of total car sales in February 2025.

The central government has set a target of 30% EV adoption by 2030, but additional levies on high-end models could slow market expansion in this segment.

Tesla, led by Elon Musk, is preparing to establish its first showroom in Mumbai’s Bandra Kurla Complex.

However, the company may not be significantly affected by this tax since its first Indian model is expected to cost less than ₹30 lakh.

Tesla also has no immediate plans for local production, with initial models expected to be imported from Germany.

Luxury EV brands such as Hyundai, Kia, and BYD are likely to feel the impact of this tax.

Popular models like the Hyundai Ioniq 5, Kia EV6, and BYD Seal fall within the ₹30 lakh+ range, making them subject to the additional tax.

This move could influence pricing strategies and potentially slow sales of premium electric models in Maharashtra.

While India pushes toward greater EV adoption, balancing affordability and taxation remains a challenge.

This policy may boost state revenues but could also affect the growth of high-end EVs in the market.

The coming months will reveal whether this tax discourages buyers or has a minimal impact on Maharashtra’s EV sector.

Image by Jebells from Pxhere (Free for commercial use / CC0 Public Domain)

Image Published on October 07, 2023

Image Reference: https://pxhere.com/en/photo/1679928