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The Karnataka government is preparing a new electric vehicle policy with road tax exemptions for EVs under ₹25 lakh, aiming to attract ₹50,000 crore in clean mobility investments by 2029. Incentives will support manufacturers and consumers.
The Karnataka government is drafting a new electric vehicle (EV) policy aimed at positioning the state as a leader in clean mobility over the next five years. This ambitious policy seeks to offer extensive incentives for both consumers and manufacturers, making electric and hybrid vehicles more accessible while stimulating investment in the state's growing clean transportation sector.
A key element of this new policy includes exempting road tax for electric and strong hybrid vehicles priced under ₹25 lakh. This initiative is designed to make EVs more affordable, encouraging consumers to shift to greener alternatives. By removing road tax on eligible vehicles, the Karnataka government aims to broaden the adoption of electric mobility across different income groups in the state.
Apart from tax exemptions, the policy outlines several other demand-side incentives to further stimulate the market. These measures are part of the government’s strategy to meet its environmental goals and accelerate the transition to cleaner forms of transportation. Financial concessions and incentives for consumers are expected to drive up the demand for electric vehicles, contributing to cleaner air and reduced reliance on traditional fuel sources.
To attract investment into the clean mobility value chain, the Karnataka government has set an ambitious target of drawing in ₹50,000 crore by 2029. The policy is expected to offer up to 50% in incentives for the value of fixed assets for companies that set up or expand operations in the state.
Additionally, manufacturers could benefit from production-linked incentives (PLIs) amounting to 1% of turnover for a five-year period, and capital investment subsidies ranging between 15% and 25%. These measures, along with exemptions from stamp duty, are designed to attract both domestic and international companies to invest in the state’s growing electric and hybrid vehicle sector.
The Karnataka government’s new policy is expected to establish the state as a major hub for electric vehicle manufacturing and sales in India. The policy aims to strengthen the clean mobility ecosystem by providing tax exemptions and incentives while driving significant economic growth in the coming years.
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