Maharashtra chief minister Devendra Fadnavis announced yesterday that the state government’s proposed 6 percent tax on luxury EVs – those priced above Rs 30 lakh – has been withdrawn. The minister was responding to a query by an opposition party member on the luxury EV tax, saying that it tax would not generate significant revenue, and undermine the state government’s commitment to electric mobility.
Maharashtra EV plans
Tesla Model 3, Model Y, Kia EV6 facelift, Mercedes and BMW EV prices would have increased due to the tax
Kia EV6 facelift prices would have been higher than Rs 65.9 lakh with the 6 percent tax.
The tax was introduced in the state budget for FY2025-26 by deputy chief minister and finance minister Ajit Pawar, and its aim was to raise extra funds. Another possible incentive to quash the proposed tax is that the Maharashtra government is said to be currently wooing Tesla to set-up a manufacturing plant in the state. As we’ve reported before, Elon Musk’s EV brand is likely to introduce its Model 3 and Model Y initially, with on-road prices expected to exceed Rs 40 lakh. A tax on luxury EVs would affect potential Tesla buyers, among those looking at EVs from companies like BYD, Mercedes, BMW and other premium brands. In fact, even Hyundai and Kia have premium EVs in the form of the Ioniq 5 and the recently launched EV6 facelift, respectively.
Promotion of electric mobility to combat air pollution in Maharashtra
The chief minister went on to claim that Maharashtra is becoming the national capital of electric vehicles, primarily because significant EV manufacturing plants coming up in Pune and Chhatrapati Sambhajinagar (formerly named Aurangabad). The move to promote EVs and electric mobility across industries is aimed at solving air pollution woes in the state.
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