new delhi, May 1 -- The expiration of electric vehicle (EV) subsidies in four key states, which together fuelled over a third of India's EV sales in FY26, is creating a new hurdle for carmakers. These state-level incentives were critical in making EVs price-competitive with traditional internal combustion engine (ICE) vehicles, according to a review of state policies and an industry executive aware of the matter. Worryingly for EV makers, Karnataka and Madhya Pradesh have also introduced fresh taxes on EVs in the past month, which experts believe could further dampen sales momentum in these markets. The developments follow a blockbuster year for the industry, with EV sales surging 84% in FY26 to nearly 200,000 units, according to data from the Federation of Automobile Dealers Associations (FADA). Some of the country's largest electric car markets, including Maharashtra, Uttar Pradesh, Rajasthan, and Tamil Nadu, have seen their purchase subsidies for consumers end, which is expected to raise overall cost of such vehicles. The subsidies expired because these states reached their pre-set targets for the number of vehicles eligible for direct purchase support. While many of these states still offer exemptions on road and registration taxes, the loss of direct subsidies is expected to drive up the total cost of ownership. While some states are ending their electric car subsidies while retaining the tax exemption, at least two states, Karnataka and Madhya Pradesh, have introduced a 4-10% road tax on EVs, which is seen as a headwind for electric car sales. Electric cars are typically Rs.2-4 lakh more expensive than ICE vehicles. Experts warn that losing state-level support could stall EV adoption, noting that the subsidy exhaustion reflected a massive surge in demand as buyers rushed to secure incentives. "Subsidies for electric cars under various state EV policies have been limited, largely due to equity considerations, and many of these funds have already been exhausted," said Amit Bhatt, India managing director at International Council on Clean Transportation....