Gujarat Cuts EV Tax to 1% Until 2026 to Boost Green Mobility and Electric Vehicle Adoption – EQ
In Short : The Gujarat government has slashed EV tax from 6% to 1% until March 2026 to revive green mobility. Buyers can save up to ₹1 lakh based on vehicle cost. The move follows subsidy withdrawal in 2024 and aims to boost EV adoption. The policy aligns with Gujarat’s goal to deploy 2 lakh EVs and cut emissions.
In Detail : The Gujarat government has announced a reduction in the motor vehicle tax for electric vehicles (EVs) from 6% to 1%. This tax relief will remain in effect until March 31, 2026, aiming to boost the adoption of electric vehicles and promote green mobility. The move is part of the state’s broader initiative to encourage eco-friendly transportation.
This 5% reduction in tax is expected to offer significant savings for EV buyers. Depending on the vehicle’s cost, buyers could save anywhere between ₹30,000 and ₹1 lakh. For example, an EV previously costing ₹10 lakh would have incurred a tax of ₹60,000, but under the new policy, the tax will be reduced to ₹10,000, resulting in a ₹50,000 saving for the buyer.
To avail of this benefit, vehicle registration must be completed online through the Vahan 4.0 portal, ensuring a seamless and transparent process for consumers. This online registration system will make it easier for citizens to benefit from the new tax structure while simplifying the process of purchasing electric vehicles.
Transport Minister Harsh Sanghavi highlighted that the decision to reduce the tax is a citizen-centric initiative aimed at promoting environmentally friendly transportation. The move reflects Gujarat’s commitment to reducing pollution and offering sustainable alternatives to traditional fuel-powered vehicles, aligning with the state’s green mobility vision.
Previously, Gujarat offered subsidies for electric vehicles, with ₹25,000 for two-wheelers and ₹1.5 lakh for four-wheelers priced below ₹15 lakh. However, the discontinuation of these subsidies led to a notable decline in EV sales. The new tax relief is expected to reverse this trend and encourage more citizens to adopt electric vehicles.
This tax reduction is part of Gujarat’s broader green mobility strategy. The state aims to deploy 2 lakh EVs by 2025, reduce carbon emissions by around 6 lakh tonnes, and save fuel expenses worth ₹5 crore. Along with this, Gujarat is investing in EV infrastructure, including charging stations and battery manufacturing units, to support the transition to electric vehicles.
