EV makers' body urges Nitin Gadkari for unified policy on road tax exemption

Society of Manufacturers of Electric Vehicles (SMEV), the electric vehicle makers' body in India, has urged the Centre to come up with a unified policy on road tax for EVs to offer a level-playing field in every state. The body worte a letter to Union Minister Nitin Gadkari, who heads the Ministry of Road Transport and Highways, to look into the matter and resolve inconsistency in the policy to help the EV market grow in the country. According to the EV makers' body, it is essential to have one policy across the country for a favourable environment to speed up EV adoption.

Currently, electric vehicles sold in India come with several benefits. Besides getting incentives through the FAME II scheme, some of the other benefits include exemption from paying road tax and registration fees. However, these benefits vary from state to state depending who offers what according to their respective EV policies.

Sanjay Kaul, Chief Evangelist at SMEV, has written a letter to Nitin Gadkari, seeking his intervention to make this policy similar across India. The letter reads, “I am writing to request your esteemed office to weigh in on a unified policy of road tax exemption for EVs that will play a pivotal role in encouraging the adoption of clean and sustainable transportation options, which is vital for our nation's environmental and economic future."

The move comes after the Ministry of Heavy Industries decided to reduce subsidy under FAME II scheme earlier this year. Under the scheme, customers buying electric vehicles were offered discounts based on the state government's policy. The states also decide on exemptions such as road tax and registration fees on EVs too.

After the reduction in FAME II subsidies, SMEV thinks Centre's unified policy on road tax will be critical to the momentum EVs have in India currently. "These fees can act as either a carrot or a stick, nudging consumers toward greener choices or pushing them back into the arms of traditional gas-guzzlers. EVs often carry a heftier price tag due to their advanced battery systems, so these extra upfront costs can be the tipping point that deters would-be buyers," said Kaul.

According to the SMEV, states like Uttar Pradesh and Punjab waive off road tax and registration fees for electric vehicles. But there are other states who do not offer similar benefits to EV owners yet. "This uneven playing field doesn't just sow confusion; it actively discourages eager EV adopters, stalling the momentum of a market ready to shift into high gear. Even more disheartening are states like Andhra Pradesh and Telangana, who once enticed buyers with tax breaks only to backtrack and impose taxes, adding yet another hurdle in the race toward a sustainable future," said Kaul.

According to Kaul, the Centre can end the confusion over road tax and registration fees on EVs by formulating a unified policy to be followed by all states.