Tamil Nadu’s luxury-car registrations have resumed their upward trajectory after a tax-induced decline in 2024, helped by the EV road-tax waiver and tighter enforcement against Puducherry-registered vehicles.
“In Tamil Nadu, all electric vehicles, including models from BMW, Mercedes-Benz and Audi are exempt from road tax,” said S Rajavel of Federation of Automobile Dealers Associations. “Puducherry, however, charges electric vehicles half the amount levied on equivalent petrol or diesel cars,” he said.
A petrol or diesel version at the same price carries a 20% levy, amounting to Rs10 lakh. Puducherry collects 7% on the combustion-engine version, which works out to Rs3.5 lakh. Its electric counterpart attracts half that amount at Rs 1.75 lakh, while Tamil Nadu charges nothing. Corroborating this, official data says Puducherry’s average has dropped from about 12 luxury cars a week to eight. Tamil Nadu, meanwhile, has moved from 67 registrations a week in 2024 to 69 now.
“As a result, now, the reverse is happening.
Puducherry car buyers are migrating to Tamil Nadu to register electric variants of these expensive cars,” Rajavel said. “Madurai’s luxury car market is showing clear signs of growth, reflecting the city’s rising purchasing power, entrepreneurship and expanding business ecosystem,” said Balamurugan Palani, president of Madurai Infra and Development Association (MID). “Luxury-auto brands should look beyond Chennai and Coimbatore and recognise Madurai as a regional premium automotive market serving the wider southern Tamil Nadu belt,” Palani said. Transport department officials said the waiver had cost the govt close to Rs490 crore in revenue during the past four months. “The state could have collected this amount had electric vehicles remained liable for road tax,” the official said.
For a Rs50 lakh car, the policy creates a gap based on its power source and place of registration. An electric model registered in Tamil Nadu attracts no road tax. The dealer network is also changing alongside demand. The KUN group has widened BMW’s presence in Madurai and also retails Porsche and BYD vehicles.