Luxury EVs set to become costlier in Maharashtra after state's tax hike

Maharashtra will impose a 6% motor vehicle tax on premium EVs priced over ₹30 lakh, raising concerns about potential sales declines.

Published on: Mar 11, 2025, 15:08:10 IST

By HT News Desk

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Premium electric vehicles (EVs) are set to become more expensive in Maharashtra after the state's government announced its decision to levy 6% as a motor vehicle tax.

However, it can also potentially hurt EV sales. For instance, when Telangana did something similar, EV penetration halved. (Representational Image/Unsplash)

This was part of the state budget proposals for the financial year 2025-26 for EVs priced over ₹30 lakh.

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Currently, Maharashtra does not levy any motor vehicle tax on EVs.

The government has also raised the motor vehicle tax by 1 percentage point on individual-owned non-transport four-wheeler CNG and LPG vehicles.

Currently, such vehicles attract a 7-9% tax depending on the type and price.

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The tax increase will increase the state government’s revenue by ₹320 crore in the next fiscal year, according to an Economic Times report.

However, it can also potentially hurt EV sales. For instance, when Telangana took a similar step, EV penetration halved, the report said.

India's current market leader for luxury EVs is BMW, with 7% of its total sales in 2024 being electric and its most affordable model, the iX1 LWB, costing ₹40 lakh.

"The introduction of a 6% tax on electric vehicles priced above ₹30 lakh in Maharashtra adds a significant cost burden on premium EVs, potentially slowing down the adoption of clean mobility solutions," the report quoted Vikram Pawah, president of BMW Group India as saying.

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According to the report, electrification in India's luxury EV segment has also been outpacing the mass car market. In the calendar year 2024, 5% of sales in the luxury segment were EVs, compared to less than 2% in the mass segment.

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HT News Desk
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