The Kerala government is preparing to hike the lifetime road tax on electric automobiles and SUVs sold in the state. To keep up with the state’s increasing rate of EV adoption, the previous 5% tax rate has been increased for more expensive EVs. According to the 2025 Kerala budget presentation, EVs priced above Rs 15 lakh would be taxed at 8%, while EVs costing more than Rs 20 lakh will be taxed at 10%. Additionally, it was announced that EVs with battery rental programs will now be taxed at 10%, regardless of price.
Kerala has continuously been one of the states with the highest rates of EV adoption in India. According to VAHAN data, four-wheeler electric vehicle sales in Kerala will exceed 10,000 units by 2024. The Kerala government anticipates an additional Rs 30 crore in revenue following the passage of the new tax rules.
With the new tax structure, EVs priced above Rs 15 lakh are likely to become more expensive in the state. The best-selling EVs priced between Rs 15 lakh and Rs 20 lakh are the Tata Nexon EV, Tata Curvv EV, MG Windsor, MG ZS EV, and Mahindra XUV 400, all of which are expected to be affected by this increase. Some popular EVs exceeding Rs 20 lakh, on the other hand, include the BYD Atto 3 and BYD Seal, as well as electric vehicles from luxury car manufacturers such as Mercedes-Benz, BMW, and Volvo, which would face the greatest increase in road tax.
