Industry players warned that the new tax structure could slow down the transition towards cleaner and more sustainable mobility in the state
The Karnataka transport department has decided to move ahead with the collection of lifetime road tax on all variants of electric cars, despite strong opposition from political leaders and industry stakeholders. Officials confirmed that necessary technical changes are currently being implemented on the Vahan portal, with the rollout expected within the next 15 days.
Under the Karnataka Motor Vehicles Taxation (Amendment) Act, 2026, electric vehicles will now attract a one-time lifetime tax at the time of registration. The tax will be levied based on price slabs—5 per cent for vehicles costing up to ₹10 lakh, 8 per cent for those priced between ₹10 lakh and ₹25 lakh, and 10 per cent for vehicles above ₹25 lakh.
The state government expects to generate approximately ₹249 crore in revenue from the move. Karnataka had previously offered a complete lifetime tax exemption on electric vehicles since 2016 to promote green mobility. However, in 2024, it introduced a 10 per cent tax on EVs priced above ₹25 lakh. The latest amendment expands the tax net to include all electric car segments.
The proposal has triggered criticism from the opposition, with the BJP terming it a regressive step that could hamper electric vehicle adoption. Bangalore South MP Tejasvi Surya, in a letter to the chief minister, argued that the policy contradicts national efforts to accelerate EV adoption. He cautioned that such a move could discourage buyers and negatively impact the EV ecosystem.
Surya also highlighted central government initiatives such as FAME India and PM E-Drive, which aim to promote electric mobility, and compared Karnataka’s policy with states like Delhi that offer full road tax waivers for electric cars below ₹30 lakh.
Electric car manufacturers have also voiced concerns, urging the government to reconsider the decision. Industry players warned that the new tax structure could slow down the transition towards cleaner and sustainable mobility in the state.
