EVs To Get Upto 10% More Expensive In This State: Big Discounts On Mahindra BE6, XEV 9e
Karnataka has played a key role in driving India’s EV revolution. It has had EV-friendly policies and tax waivers for a long time. This is set to change soon as the south Indian state is now set to introduce taxes on all electric vehicles. According to a bill cleared in the state assembly, 5-10% tax will be levied from EV owners, starting from April 1. This will make electric vehicles more expensive in the state. Mahindra has now announced big discounts on the BE6 and XEV 9e electric SUVs in Karnataka.
The new tax regime comes into effect on April 1, 2026. Buyers registering before March 31st will qualify for benefits of up to Rs 2.60 lakh on the BE6 and Rs 2.70 lakh on the XEV 9e. This information comes from a digital creative put out by PPS Motors- a dealer in Karnataka. These are thus likely to be dealer-level discounts and benefits. It also mentions that these apply only to limited stock and till offers end.
The new framework proposes to levy 5-10 percent tax depending on the EV price. Electric vehicles with ex-showroom prices under Rs 10 lakh, will be taxed at 5%. Those priced in the Rs 10 lakh -25 lakh bracket will fall under the 8% slab. EVs priced above Rs 25 lakh will have to pay 10% tax, at the time of registration in Karnataka. This move is expected to widen the price gap between electric vehicles and their internal combustion engine (ICE) counterparts.
The proposed EV taxes are still lower than what ICE vehicles attract- typically in the range of 13 to 18 percent of the total vehicle cost. But that’s no excuse to justify bringing EVs under the slabs.
Interestingly, the new bill partly negates the state’s Clean Mobility Policy 2025. It had waived off road tax and registration charges on all electric vehicles priced under Rs 25 lakh. Pricier EVs were taxed at 10%- same as the revised slab. Karnataka’s decision to tax EVs comes at a time when states like Maharashtra, Uttar Pradesh, Tamil Nadu and Delhi are considering tax waivers on EVs to boost adoption.
Waiver cancellations appear to be driven by financial pressures. Motor vehicle tax is a major revenue source. EV volumes have increased steadily in the past few months ( meaning they may not really need incentive support anymore), making it difficult to sustain 100% waivers. Officials seem to be eyeing EV taxation to pay for the financial pressure that the state has lately been facing, at least partly.
Karnataka’s decision to tax EVs comes seven months after the centre reduced GST on ICE vehicles sharply, tapering the price difference between them and EVs. Electric cars are generally Rs 2-4 lakhs more expensive than ICE equivalents, but complete tax waivers have helped in keeping the prices sensible, in comparison. Cancellation of the same is expected to widen the gap, eventually reflecting in the adoption rate of EVs.
The state of Karnataka has always supported electric vehicles. It even had the reputation of being one of the most EV-friendly states in the country. It had a full waiver on EV taxes from 2016 to 2024. These applied to electric two, three and four wheelers, regardless of their price or segment. Driving this was the Karnataka Electric Vehicle & Energy Storage Policy, which envisioned Bengaluru to become the ‘EV Capital of India’.
These incentives helped in increasing the EV penetration in the state to 6.4% (passenger vehicle segment) by the end of 2025. This was well above the national average of 4 per cent. More interestingly, 12% of India’s total EV sales came from Karnataka last year!
If you look at the timelines, you’ll notice that Karnataka had been giving tax exemptions on EVs even before the National Electric Mobility Mission Plan (NEMMP) 2020 and PM E-Drive initiatives came into being.
The PM E-Drive has recently been reducing subsidies and reworking incentive structure based on segments. The intention seems to be to transition to a market-driven ecosystem. Deadlines for electric two and three wheelers have been extended while direct subsidies are no longer available on electric cars. Once the subsidies are pulled back, EVs will have to compete completely on merit. Karnataka seems to be taking a similar route.