Gujarat extends 5% subsidy on electric vehicles till March 2027

The Gujarat government has announced an extension of its 5% subsidy on electric vehicles (EVs) until March 31, 2027, as part of efforts to promote cleaner transport amid global uncertainties affecting crude oil supplies.

As per an official circular issued on March 30, the subsidy scheme will continue in a bid to encourage the adoption of low-emission mobility solutions. The move comes against the backdrop of disruptions in global oil supply chains following geopolitical tensions involving the United States, Israel and Iran.

Under the revised framework, the subsidy amount will be adjusted against the road tax payable on electric vehicles. Industry experts noted that road tax currently stands at around 6% of a vehicle’s price, and the subsidy will be deducted before the final tax payment is made.

In the two-wheeler segment, which comprises around 10 major brands, electric scooters and bikes are typically priced between ₹1.25 lakh and ₹2 lakh. Buyers can expect subsidies ranging from approximately ₹6,250 to ₹10,000. For electric cars, priced at around ₹45 lakh, the subsidy could go up to nearly ₹2.25 lakh.

Market sources indicate a sharp rise in consumer interest, with enquiries for electric vehicles reportedly increasing by nearly 200% in recent months. However, this surge in interest has not yet translated into proportional sales growth.

Despite this, the share of electric vehicles in Gujarat’s overall automobile market has risen significantly, with estimates suggesting it now accounts for more than half of total market interest.