Maharashtra Chief Minister Devendra Fandavis announced that the state government has removed the proposed 6% tax on luxury electric vehicles (EVs) priced above Rs 30 lakh. This tax was originally introduced in the state budget for financial year 2025-26 by Deputy Chief Minister and Finance Minister Ajit Pawar to generate extra revenue. However, Fadnavis later stated that the tax would not bring in much money and could hurt the government’s efforts to promote electric vehicles.
How This Affects Luxury EVs
- If the tax had been applied, EV prices from luxury brands like Mercedes, Audi, BMW, Hyundai, Kia and the upcoming Tesl would have increased. This could have discouraged buyers from purchasing these cars. For example, the recently launched Kia EV6 facelift, which costs ₹65.9 lakh (ex-showroom), would have been even more expensive.
- Another major reason for removing this tax is that Maharashtra is trying to attract Tesla to set up a manufacturing plant in the state.
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Maharashtra’s EV Push
The Maharashtra government is actively promoting electric mobility to reduce air pollution. Varipus major EV production plants are being set up in Pune and Chhatrapati Sambhajinagar (Aurangabad). By removing the luxury EV tax, the government is encouraging more people to switch to EVs, making the state more attractive for electric vehicle manufacturers and buyers.
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