Delhi clears $1.6 billion EV policy, puts petrol two-wheelers on the clock

India’s national capital has approved a new electric vehicle policy with a ₹15,000 crore, or about $1.59 billion, outlay over four years, combining purchase subsidies, scrappage payments, tax waivers and phased registration curbs to push India’s capital toward cleaner transport.

The plan, cleared by the Delhi Cabinet on Monday, is expected to take effect from 1 July and run until 31 March 2030.

The policy is one of the city government’s most ambitious attempts to cut vehicle emissions, a major contributor to Delhi’s winter pollution.

The draft framework said the aim was to speed up EV adoption, expand charging infrastructure and reduce reliance on internal combustion engine vehicles.

The first set of benefits targets the mass market. Buyers of electric two-wheelers will get ₹10,000 per kWh in the first year, capped at ₹30,000.

The subsidy will fall to ₹6,600 per kWh, capped at ₹20,000, in the second year and ₹3,300 per kWh, capped at ₹10,000, in the third. The incentive applies to electric two-wheelers with an ex-factory price of up to ₹2.25 lakh.

Electric auto-rickshaws will receive ₹50,000 in the first year, ₹40,000 in the second and ₹30,000 in the third.

The benefit will apply both to new e-autos registered with a Delhi permit and to replacements for old CNG auto-rickshaws. Electric four-wheeler goods vehicles in the N1 category will be eligible for ₹1 lakh in the first year, ₹75,000 in the second and ₹50,000 in the third.

The policy also links incentives to scrappage. Buyers of electric two-wheelers will get ₹10,000 for scrapping Delhi-registered BS-IV or older two-wheelers.

Electric three-wheeler buyers will get ₹25,000. Buyers of electric cars priced up to ₹30 lakh will get ₹1 lakh if they scrap a Delhi-registered BS-IV or older car and buy the EV within six months of receiving a certificate of deposit from an authorized scrapping facility.

The car scrappage benefit will be limited to the first 100,000 eligible applicants.

All eligible EVs registered in Delhi during the policy period will get a full exemption from road tax and registration fees.

Electric cars priced up to ₹30 lakh will receive the exemption until 31 March 2030. Costlier EVs will not.

Hybrids have been excluded from the final policy, although the April draft had proposed a 50% exemption for strong hybrid vehicles priced up to ₹30 lakh.

The sharper shift is regulatory. From 1 January 2027, only electric three-wheelers will be allowed for new registration in Delhi.

From 1 April 2028, only electric two-wheelers will be eligible for new registration. That gives auto-rickshaw operators and two-wheeler buyers a transition window, while setting a clear cut-off for new petrol and CNG registrations in those categories in the capital.

The policy also covers school buses, aggregators, delivery fleets and government vehicles.

Schools will have to electrify at least 10% of their bus fleet by the end of the second year from notification, 20% by the end of the third year and 30% by 31 March 2030. The mandate applies to buses owned, leased or hired by schools.

Fleet aggregators and delivery service providers will face earlier limits. From 1 January 2026, no new conventional diesel or petrol vehicles will be allowed in existing fleets of certain light commercial vehicles, light goods vehicles and two-wheelers, though BS-VI two-wheelers may be added until the end of 2026.

All hired or leased vehicles used by the Delhi government will have to be electric from the date of notification, except emergency or exempted vehicles.

All new intra-state buses procured by the Delhi Transport Corporation and the Transport Department will also be electric, unless the government allows other cleaner-fuel buses, such as hydrogen buses.

The charging network will decide whether the policy works beyond paper. Delhi Transco Ltd will be the nodal agency for public charging and battery-swapping infrastructure. It will aggregate demand, identify sites, assess load requirements and build a single-window clearance system for charge-point and battery-swapping operators.

The Delhi government will also support the setting up of 32,000 EV charging points across the city. The draft policy also requires original equipment manufacturers operating in Delhi to deploy at least one public charging station per dealer, with at least three charging points for two- and three-wheelers and two charging points for four-wheelers.

The policy creates a wider system around the transition. Delhi Transco will monitor charging reliability and service standards. The Environment Department will assess emission reductions from new EV registrations.

The Delhi Pollution Control Committee will help set up battery collection centers under a public-private partnership model and frame procedures for the safe collection, storage and transfer of used batteries to authorized recyclers.

The government will maintain a dedicated EV Fund under the Transport Department. The draft lists state budget allocations, central and state schemes, the Air Ambience Fund, Environment Compensation Charge, PM E-DRIVE funds, cess and taxes among possible sources.

The policy comes as Delhi continues to struggle with some of the world’s worst urban air pollution. The draft cites the Commission for Air Quality Management as identifying vehicular emissions as the largest contributor to Delhi’s winter air pollution, at 23%.

It also says two-wheelers account for about 67% of Delhi’s vehicle stock, explaining why the government has focused heavily on electrifying two-wheelers and three-wheelers rather than only private cars.