If you’re planning to buy an electric vehicle (EV) or a CNG car, be prepared to pay more. Maharashtra’s latest budget has introduced higher taxes on vehicle purchases, making EVs and fuel-efficient cars more expensive. This decision has sparked a debate—should the government reduce taxes instead of pressuring automakers to lower prices?

New Tax Rules: How Much More Will You Pay?

Maharashtra Deputy Chief Minister and Finance Minister Ajit Pawar has announced a 6% tax on EVs priced above ₹30 lakh. Previously, EVs enjoyed almost negligible taxation, making them an attractive choice for buyers. Now, luxury EV makers like Tesla, BMW, Audi, Mercedes, and BYD will face higher costs.

Even Indian automaker Mahindra is affected. The top trim of the Mahindra XUV 9e costs ₹30.5 lakh (ex-showroom)—₹50,000 above the tax-free limit. This means it will be taxed under the new rule, potentially discouraging buyers.

Additionally, the government has increased the tax on CNG and LPG personal vehicles by 1%, impacting those who opt for fuel-efficient alternatives due to rising petrol and diesel prices.

Will Mahindra Reduce SUV Prices?

A key question arises: Will Mahindra lower its SUV prices to avoid the new tax?

• If Mahindra reduces the price of the XUV 9e below ₹30 lakh, it could maintain demand and make its EV more attractive to buyers.
• However, automobile pricing depends on various factors, including raw material costs, global supply chains, and R&D investments. Cutting prices might not be a feasible option.

Government Taxes vs. Manufacturer Price Cuts

The government aims to generate ₹320 crore in revenue from these increased taxes. However, higher taxation on EVs contradicts the push for green mobility. The central government and state governments have been offering subsidies and incentives to promote EV adoption. Increasing taxes might slow down this transition.

The Consumer Dilemma: To Buy or Not to Buy?

With higher taxes on EVs and CNG vehicles, buyers are now reconsidering their choices. While fuel-efficient vehicles help reduce pollution and long-term fuel costs, the upfront price hike may discourage potential buyers.

Final Thoughts

• If Mahindra lowers its prices, it can maintain demand and keep its EVs tax-free.
• If the government reduces taxes instead, it will encourage more people to switch to EVs.
• Higher taxation may slow down EV adoption in India, which goes against the country’s long-term sustainability goals.

What Do You Think?

Should Mahindra cut prices, or should the government reconsider the new tax policy? Let us know in the comments!