Delhi has long aspired to become India’s electric vehicle (EV) capital. That ambition took shape with the launch of the Delhi Electric Vehicles Policy 2020, approved by the Delhi Cabinet in December 2019.
The policy sought to accelerate EV adoption through generous purchase subsidies, tax exemptions and charging infrastructure while targeting a milestone that 25% of all new vehicle registrations would be electric by 2024.
The outcome, however, fell well short of expectations.
Despite subsidies of up to ₹30,000 for electric two-wheelers and ₹1.5 lakh for electric cars, EV penetration remained modest. As of June 2026, electric vehicles accounted for only 8.65% of registered two-wheelers and 10.1% of four-wheelers in Delhi. Multiple extensions of the policy could not bridge the gap between government ambition and consumer behaviour.
Recognising these shortcomings, the Delhi government has introduced EV Policy 2.0, effective from July 1, 2026, which will remain in force until 2030. Unlike its predecessor, the new policy relies less on subsidies and more on regulatory mandates. It seeks not merely to encourage EV adoption but to fundamentally reshape Delhi’s automobile market.
The government has justified this shift by pointing to Delhi’s severe air pollution. According to transport department data, two- and three-wheelers account for a significant share of vehicular emissions, while commercial goods vehicles are major contributors to urban pollution. Electrification of these segments, therefore, has become the centrepiece of the government’s clean mobility strategy.
The most significant change in EV Policy 2.0 is its transition from incentive-led adoption to mandatory electrification.
Beginning January 1, 2027, only electric three-wheelers and N1-category commercial goods vehicles will be eligible for new registration in Delhi. From April 1, 2028, every newly registered scooter or motorcycle must be electric. Existing petrol and CNG two-wheelers will be allowed to complete their operational life, but the direction of policy is unmistakable—the era of new internal combustion engine (ICE) registrations is being gradually phased out.
Institutional school buses have also been brought within the transition framework, with operators required to convert at least 10% of their fleets to electric within two years.
Financial incentives continue, although in a more targeted form. The government has linked subsidies to vehicle scrappage rather than merely rewarding new purchases. Owners scrapping BS-IV or older vehicles while purchasing an EV will receive an additional incentive of ₹1 lakh for electric cars and ₹10,000 for electric two-wheelers. These benefits, however, will be available only to the first one lakh eligible applicants.
The policy also provides a complete waiver of road tax and registration fees for eligible EVs. Purchase incentives will gradually taper over three years. Electric two-wheelers will receive ₹30,000 in the first year, ₹20,000 in the second and ₹10,000 in the third. Incentives for electric three-wheelers will similarly decline from ₹50,000 to ₹30,000 over the same period, while N1 commercial trucks will receive a one-time subsidy of ₹1 lakh during the first year of the policy.
Notably, the policy extends these benefits only to pure battery electric vehicles (BEVs). Hybrid and plug-in hybrid vehicles have been excluded from subsidies and tax concessions, signalling the government’s clear preference for full electrification.
Infrastructure development forms the second pillar of the strategy. The government proposes an investment of nearly ₹15,000 crore over four years to establish more than 30,000 public charging points across the National Capital Region. If implemented successfully, this would substantially improve charging availability and reduce one of the biggest barriers to EV adoption.
The policy has received broad support from environmental groups. Clean-air advocates argue that faster electrification can significantly reduce PM2.5 emissions, lower greenhouse gas emissions and improve public health in one of the world’s most polluted cities. The transition also promises a second dividend by reducing India’s dependence on imported fossil fuels and strengthening energy security.
Consumers have largely welcomed continued financial incentives and the planned expansion of charging infrastructure. However, concerns remain substantial. High purchase prices, especially after subsidies taper, expensive battery replacements, inadequate charging facilities in residential neighbourhoods and range anxiety continue to discourage many prospective buyers. Some vehicle owners have also expressed reservations about the government’s decision to gradually eliminate new registrations of petrol, diesel and CNG vehicles, arguing that it restricts consumer choice.
Economists and policy analysts generally view the policy as a positive long-term investment. They believe it could stimulate domestic EV manufacturing, generate green employment, reduce oil imports and lower healthcare expenditure arising from air pollution. At the same time, they caution that the fiscal burden of subsidies, rising electricity demand, battery raw material dependence, recycling infrastructure and power grid readiness will require careful policy management.
Industry response has been cautiously supportive rather than enthusiastic.
The Society of Indian Automobile Manufacturers (SIAM) has welcomed the policy’s environmental objectives but warned against aggressive timelines. It argues that abrupt restrictions on ICE vehicles could disrupt the automobile market and recommends a gradual transition that reflects consumer demand and technological readiness.
The Society of Manufacturers of Electric Vehicles (SMEV) has broadly endorsed the policy while urging the government to maintain stable subsidy regimes, strengthen domestic battery manufacturing and expand local component production.
The Federation of Automobile Dealers Associations (FADA) has highlighted operational challenges. Dealers remain concerned about unsold inventories of petrol and diesel vehicles, the investment required for EV servicing facilities and the urgent need to train technicians capable of maintaining electric vehicles.
Environmental organisations, including the Centre for Science and Environment (CSE), have strongly backed the policy, arguing that accelerated EV adoption will significantly improve air quality. They have, however, urged the government to move faster in electrifying public transport and integrate renewable energy into the charging ecosystem. Greenpeace India has similarly advocated faster implementation alongside sustainable battery recycling and clean electricity for charging infrastructure.
Charging infrastructure companies have welcomed the government’s investment plans but argue that execution will be the real challenge. They seek quicker regulatory approvals, easier access to land and standardised technical norms to accelerate charger deployment.
Fleet operators, including public transport agencies, logistics firms and app-based delivery companies such as Zomato, Swiggy, Amazon and Flipkart, have also supported the policy. Lower operating costs and corporate sustainability commitments make EV adoption commercially attractive. However, these companies emphasise the need for more fast-charging stations, battery-swapping facilities and affordable financing for fleet operators and delivery partners.
Perhaps the strongest criticism has come from some automobile manufacturers.
Maruti Suzuki, India’s largest passenger vehicle manufacturer, has opposed the policy’s phased restrictions on new petrol, diesel and CNG registrations. Chairman R. C. Bhargava has consistently argued that governments should not dictate technological choices.
According to Bhargava, India’s mobility transition should remain technology-neutral, allowing consumers to choose among ICE vehicles, CNG, hybrids and battery electric vehicles. He has repeatedly maintained that India’s charging infrastructure remains inadequate, battery costs are still high and hybrid technology can deliver substantial fuel savings and emissions reduction without imposing the affordability challenges associated with battery-electric vehicles.
Bajaj Auto has adopted a more measured position. While supporting EV growth, it argues that market demand should determine the pace of transition. The company advocates gradual phase-out timelines, policy stability and stronger domestic battery supply chains rather than regulatory compulsion.
Ultimately, Delhi’s EV Policy 2.0 represents one of India’s most ambitious clean mobility initiatives. Its objectives are difficult to dispute. Cleaner air, lower carbon emissions, reduced oil imports and the development of a competitive EV ecosystem would together deliver significant environmental and economic benefits.
However, the policy’s success will depend less on its intent than on its execution.
Several critical questions remain unanswered. The mechanism for subsidy disbursement is yet to be clarified. Whether benefits will be transferred directly to consumers or routed through manufacturers could significantly influence market response. The government’s plan to establish over 30,000 charging stations is equally ambitious, but identifying suitable land, securing approvals and avoiding legal delays will be formidable challenges in a densely populated metropolis like Delhi.
Equally important is the need to address concerns raised by industry, consumers, dealers, economists and environmental experts. Charging infrastructure must expand at the same pace as vehicle adoption. Electricity distribution networks must be strengthened. Battery recycling systems need to be developed. Domestic manufacturing of batteries and critical minerals must be accelerated. Most importantly, policy stability will be essential to sustain investor confidence.
Delhi’s first EV policy demonstrated that generous subsidies alone cannot transform the market. EV Policy 2.0 attempts to achieve that transformation through regulation and mandatory adoption. Whether this more assertive approach succeeds will ultimately depend on the government’s ability to match ambitious targets with equally effective implementation.
(The author is former CMD of Scooters India Ltd; Views expressed are personal)
