The Karnataka government is preparing to introduce a new electric vehicle (EV) policy that could bring significant benefits to EV buyers and manufacturers in the state. One of the major highlights of this policy is the likely exemption from road tax for electric and strong hybrid vehicles, aimed at promoting the adoption of clean mobility solutions.
Road Tax Relief on EVs and Strong Hybrids
As per reports, the upcoming policy may offer a road tax exemption on vehicles priced up to ₹25 lakhs. This includes both electric vehicles and strong hybrid cars, which are seen as a greener alternative to conventional vehicles. However, the tax relief will apply only to strong hybrid models and not to mild hybrids.
Currently, strong hybrid cars below ₹25 lakhs attract an 18% road tax. The new policy proposes to reduce this rate to 13%, making such vehicles more affordable for buyers. This initiative follows a similar move made by the Uttar Pradesh government earlier this year, which has resulted in a significant increase in hybrid car sales in the state.
Massive Investment Plan for Clean Mobility
Alongside tax benefits, the Karnataka government is looking to invest a substantial ₹50,000 crore into clean mobility projects by 2029. This investment is expected to drive the growth of electric and hybrid vehicles, as well as infrastructure developments like charging stations and EV-friendly roads.
Additionally, the new EV policy will include several incentives to encourage new projects and expansions in the clean mobility space. A Performance-Linked Incentive (PLI) scheme is expected, with a 1% turnover incentive on new projects for the first five years. There are also talks of offering investment subsidies ranging from 15% to 25% and stamp duty exemptions for companies involved in electric vehicle manufacturing and development.
Encouraging Clean Energy Adoption in Karnataka
This move is part of Karnataka’s broader efforts to push for environmentally friendly transportation options. The state is aiming to reduce pollution by encouraging the use of not only electric vehicles but also other clean fuel options such as hydrogen-powered vehicles.
By offering financial incentives and reducing taxes, the Karnataka government hopes to make eco-friendly vehicles more attractive to consumers, boosting both demand and the state’s green energy goals.
Comparing Karnataka’s Policy with UP’s EV Push
Karnataka’s EV policy comes after similar measures were implemented in Uttar Pradesh, which saw a positive impact on the sales of strong hybrid vehicles. Strong hybrid sales in UP jumped from 390 units in June 2024 to 996 units by August 2024 after the Yogi government extended EV incentives until 2027. These measures included discounts of up to ₹1 lakh on electric four-wheelers.
The Karnataka government is optimistic that its policy will have a similar effect, pushing more people to opt for electric and hybrid vehicles, ultimately reducing the state’s carbon footprint.
