Electric And Hybrid Vehicle Sales In Uttar Pradesh Hit Roadblock As Tax Exemption Ends

Electric and strong hybrid vehicle sales in Uttar Pradesh reportedly slowed this week as dealers and automakers awaited clarity from the state government following the expiry of a three-year road tax exemption on Monday (13 October).

The slowdown comes at a particularly inopportune moment, coinciding with the festive season when car sales typically surge across India.

Until Monday, electric and strong hybrid vehicles enjoyed a 100 per cent waiver on road tax and registration fees under Uttar Pradesh's Electric Vehicle Manufacturing and Mobility Policy.

From Tuesday, however, the exemption became available only to electric and strong hybrid vehicles manufactured or assembled within the state.

As there are currently no car manufacturing plants in Uttar Pradesh, all buyers of electric and strong hybrid cars now face the usual 9-11 per cent road tax.

The policy change has brought vehicle sales to a near standstill. A dealer of strong hybrid vehicles in Uttar Pradesh did not sell or register any cars on Tuesday, awaiting state government guidance on whether the exemption would be extended.

Industry executives noted that the government should have clarified the policy before the 13 October deadline.

The tax exemption, which had been in place since October 2022, significantly boosted hybrid vehicle sales in the state.

Monthly sales of strong hybrid cars more than doubled following July's clarification that the waiver applied to hybrids, jumping from 390 units in June to 996 in August.

Maruti Suzuki, Toyota and Honda, the primary manufacturers of hybrid vehicles in India, stand to be most affected by the policy expiration.

Road tax is typically paid during registration, either directly at regional transport offices or through dealerships that handle the process for buyers.

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