Delhi's Draft EV Policy 2.0: Tax Waivers, Hybrid Benefits, and ICE Ban

The Delhi government has released its comprehensive draft Electric Vehicle (EV) Policy 2026-2030, often referred to as EV Policy 2.0, marking a significant step towards accelerating electric vehicle adoption and combating air pollution in the national capital. The policy, which builds upon the success of the earlier 2020 EV policy, outlines a range of fiscal and non-fiscal incentives, along with stringent timelines for transitioning to cleaner mobility options. At the core of the new draft policy is a major financial relief for electric vehicle buyers. It proposes a **100% exemption on road tax and registration fees for all electric cars with an ex-showroom price of up to ₹30 lakh.** This full waiver is set to remain in effect until March 31, 2030, aiming to make EVs more accessible and attractive to a broader segment of the population. However, electric cars priced above the ₹30 lakh threshold will not be eligible for these exemptions, focusing the benefits on mass-market electric vehicles. In a notable inclusion, the draft policy also extends **partial benefits to strong hybrid vehicles**, which will now qualify for a **50% exemption on road tax and registration fees**. This marks a departure from previous policies that did not offer road tax exemptions for strong hybrids, reflecting a more balanced approach to green mobility, though it may spark debate among pure EV advocates. Beyond financial incentives, the Delhi EV Policy 2026-2030 introduces ambitious mandates for phasing out internal combustion engine (ICE) vehicles, particularly in the two-wheeler and three-wheeler segments, which are major contributors to Delhi's vehicular pollution. From **January 1, 2027, only electric three-wheelers will be permitted for new registrations** in Delhi. Taking an even bolder step, the policy proposes that **from April 1, 2028, only electric two-wheelers will be allowed for new registrations** in the capital. This phased restriction is expected to significantly transform Delhi's urban mobility landscape, given that two-wheelers account for a substantial portion (nearly 67%) of the city's vehicle population. The policy also includes various other incentives and provisions designed to foster a robust EV ecosystem. These include **purchase incentives** for electric two-wheelers (up to ₹30,000 in the first year, tapering over three years), electric three-wheelers (up to ₹50,000 in the first year), and electric light commercial vehicles (N1 category, up to ₹1 lakh in the first year), with all subsidies to be disbursed through Direct Benefit Transfer (DBT). To further encourage the transition, **scrappage-linked incentives** are proposed for buyers who replace their older BS-IV or earlier registered vehicles with new EVs. For instance, electric car buyers (under ₹30 lakh) can receive a scrappage incentive, available to the first 100,000 eligible applicants. Similar incentives apply to two-wheelers (₹10,000), three-wheelers (₹25,000), and N1 goods vehicles (₹50,000). Recognizing the critical role of infrastructure, the draft policy emphasizes the **expansion of charging infrastructure**. Delhi Transco Limited has been designated as the nodal agency for this initiative, with plans to introduce a single-window clearance system for faster installation of charging points. The policy also mandates charging stations at all OEM dealerships and focuses on both public charging and battery swapping stations. The government aims to establish a comprehensive network, with targets for tens of thousands of chargers and battery swapping stations in the coming years. The policy's overarching objectives are to drastically reduce vehicular emissions, improve air quality, and accelerate the adoption of electric vehicles across all segments. It proposes a significant financial outlay of ₹3,954.25 crore to support these initiatives. The draft policy is currently open for public feedback for 30 days from its release on April 11, 2026, after which it will be finalized and notified. This public consultation period allows all stakeholders, including citizens, industry leaders, and environmental groups, to provide their input on the proposed reforms. The implementation of this policy is expected to significantly influence vehicle buying trends in Delhi, benefiting mass-market EV manufacturers and driving the city towards its goal of becoming a global leader in electric mobility. Prior to this draft, the Delhi government had extended its existing EV policy until March 31, 2026, while the new policy was being finalized and undergoing public consultations. The swift release of the new draft policy after the expiry of the previous extension underscores the government's commitment to maintaining momentum in EV adoption.

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