NEW DELHI: Major electric car makers, including JSW MG Motor India, Tata Motors, Mahindra & Mahindra, Hyundai Motor India, and Kia India, have written to Karnataka chief minister Siddaramaiah, urging the state to reconsider a new 5–10% lifetime tax on electric vehicles (EVs), according to correspondence reviewed by Mint and a person familiar with the matter.
The companies have sought a meeting with Siddaramaiah, warning that the move could affect air pollution goals, oil imports, energy security and the investment outlook for India’s EV industry.
Mint reported on 31 March that Karnataka had reversed its earlier waiver, a step that risks slowing adoption in one of India’s key EV markets. In 2025, the state accounted for 12% of the country’s electric car sales, with more than 21,000 units sold and passenger vehicle penetration of 6.4%, compared with 4% nationally.
“The objective of this engagement is to share industry perspectives on the recent revisions in Road Tax applicable to electric passenger vehicles in the Karnataka State. While we fully appreciate the state’s fiscal considerations, we would like to submit that policy signals of this nature may have a bearing on the reduction in air pollution, crude oil import and energy security, consumer sentiment and investment outlook, particularly at a time when the EV ecosystem is at a critical growth juncture,” the correspondence said.
Emailed queries to the Karnataka government, JSW MG Motor India, , Mahindra & Mahindra, Hyundai Motor India, and Kia India went unanswered till press time.
A bill passed last month in the Karnataka assembly imposes a 5-10% tax on EVs based on their registration price, widening the gap with cheaper internal combustion engine (ICE) vehicles. The move partly negates Karnataka’s 2025 clean mobility policy, which waived road and registration taxes for EVs priced under ₹25 lakh.
Price gap and policy signals
ICE vehicles in Karnataka will attract a higher lifetime registration tax of 13-18% of a vehicle’s cost under the amended law. Electric cars still generally cost ₹2-4 lakh more than comparable petrol or diesel models, though tax waivers in several states have helped narrow the gap.
The state government’s decision comes roughly seven months after the Centre cut the goods and services tax (GST) on ICE cars from 28% to 18%, based on engine size. This move reduced the tax gap between EVs and ICE cars from 23% to 13%.
According to Deloitte’s Global Consumer Study 2026, about one-third of Indian consumers cited high prices as a key barrier to EV adoption. Karnataka’s move also comes as states such as Maharashtra, Uttar Pradesh, Tamil Nadu and Delhi waive EV road taxes to promote adoption.
The correspondence also said Karnataka’s has been built on policy consistency and forward-looking incentives, and that “Sustaining this momentum will be crucial for achieving state environmental goals and also for reinforcing its position as a preferred destination for future investments in EV value chain”.
None of the automakers have electric car manufacturing facilities in the state, though Tata Motors operates an electric commercial vehicle plant in Dharwad.
Experts note that new technologies need sustained policy support to scale.
“New technologies require sustained policy support in their early years to reach scale. However, as markets mature, a calibrated transition becomes necessary,” said Amit Bhatt, India managing director of the International Council on Clean Transportation, a global think-tank working on clean mobility.
“For instance, Norway introduced full road taxation on EVs in 2022, when their share in new car sales had crossed 80%. In Karnataka’s case, it is important to assess whether EV uptake has reached a critical level before introducing taxation. The key will be to ensure that any transition is gradual and does not disrupt the momentum of EV adoption,” Bhatt added.