Luxury electric vehicles (EVs) are going to become more expensive in Maharashtra from now on as the state has decided to levy a 6% motor vehicle tax on EVs that are more than ₹30 lakh. This new tax, which was announced as part of the 2025-26 state budget proposals, is a departure from the current policy in Maharashtra where there is no motor vehicle tax on EVs. Furthermore, the state government has gone further and increased the motor vehicle tax by 1 per cent for individually owned non-transport CNG and LPG four-wheelers. These vehicles which are currently attract 7-9% tax, will now attract higher levies depending on type and price. The government expects the tax revisions to boost revenue by Rs 320 crore in the next fiscal year, as per a report in Economic Times. However, there is a tax on premium EVs, which can hamper the growth. A similar move in Telangana, resulted in a 50% decrease in EV penetration, and there are concerns about Maharashtra’s market. BMW, India’s luxury EV market leader, saw 7 per cent of its total 2024 sales from EVs, and its entry-level iX1 LWB started from ₹40 lakh. Vikram Pawah, president of BMW Group India, said that the 6 per cent tax would increase the costs significantly and may hamper the growth of clean mobility. Nevertheless, the take up rate of luxury EVs has been faster than that of mass market EVs. In 2024, 5 per cent of luxury car sales were electric, compared with less than 2 per cent in the mass market. This, in turn, has raised concerns that Maharashtra’s new tax will affect the growth of the premium EV market.
Luxury EVs Set to Become Costlier in Maharashtra
