Maharashtra Hikes Tax on Luxury Electric Vehicles, Prices Set to Rise
Maharashtra Hikes Tax on Luxury Electric Vehicles, Prices Set to Rise
In 2024, electric vehicles accounted for 5% of sales in the luxury segment, while the mass segment saw less than 2% in EV sales.
Premium electric vehicles (EVs) in Maharashtra are expected to see a price increase following the state government’s announcement of a 6% motor vehicle tax.
The state budget proposals for the financial year 2025-26 included provisions for electric vehicles priced above ₹30 lakh. The tax hike is projected to boost the state government’s revenue by ₹320 crore in the upcoming fiscal year, as reported by the Economic Times.
Nonetheless, this move could negatively impact electric vehicle (EV) sales. The report noted that when Telangana implemented a similar tax increase, the adoption of EVs dropped by 50%.
Maharashtra currently imposes no motor vehicle tax on electric vehicles (EVs). Additionally, the government has increased the motor vehicle tax by 1 percentage point for privately owned non-transport four-wheelers that run on CNG and LPG. As it stands, these vehicles are subject to a tax rate ranging from 7% to 9%, depending on their type and price.
India’s leading brand in the luxury electric vehicle sector is BMW, which is projected to have 7% of its total sales in 2024 coming from electric models. The entry-level offering from the brand, the iX1 LWB, is priced at ₹40 lakh.
The ET report also says that the electrification of India’s luxury electric vehicle market is advancing more rapidly than that of the mass car market. In 2024, electric vehicles accounted for 5% of sales in the luxury segment, while the mass segment saw less than 2% in EV sales.
