CHENNAI: The Tamil Nadu government has extended the 100 per cent motor vehicle tax exemption for all categories of electric vehicles for an additional two years, from January 1, 2026 to December 31, 2027.

The order, issued by Additional Chief Secretary Dheeraj Kumar and published in the Government Gazette on Monday, states that the concession applies to both transport and non-transport Battery Operated Vehicles as defined under the Central Motor Vehicles Rules.

The State had earlier granted full tax exemption for electric vehicles up to December 31. Based on requests from vehicle manufacturers and a recommendation from the Transport Commissioner, the exemption has been extended to support the continued adoption of electric mobility, in line with the Tamil Nadu Electric Vehicle Policy, 2023.

According to the government, electric vehicle usage in Tamil Nadu has reached nearly 7.8 per cent in 2025, marking steady progress in the sector. Manufacturers had urged the State to continue providing tax incentives to sustain this growth.

The Transport Commissioner has been directed to conduct a detailed study on the impact of imposing tax on EVs in the future and to compare taxation practices followed by other States. The order was issued with the concurrence of the Finance Department.