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Delhi is set to finalize its new Electric Vehicle (EV) policy by March 2026, aiming to boost EV adoption and reduce dependence on petrol, diesel, and CNG vehicles. The draft includes higher green cess, incentives for EV buyers, subsidies on battery capacity, low-interest EV loans, and scrappage benefits for old vehicles.
Delhi Plans New EV Policy to Boost Electric Vehicle Adoption
New Delhi: To promote electric vehicles (EVs) in Delhi, the government has prepared a new draft EV policy, which is expected to be implemented by March 2026. The policy includes a proposal to increase the cess (tax), aimed at slowing down the purchase of new petrol, diesel, and CNG vehicles and encouraging people to switch to electric vehicles. However, the final form of the policy will be decided only after cabinet approval.
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According to VAHAN data, the share of electric vehicles in Delhi is currently around 14 percent. This year, 8 lakh vehicles have been registered, of which 1.11 lakh are electric. The government aims to further increase this share. To achieve this, incentives will be provided to EV buyers, and an additional levy (cess) may be imposed on conventional vehicles.
Delhi launched its first EV policy in August 2020, which included exemptions from road tax and registration fees, and a subsidy of ₹5,000 per kilowatt-hour of battery capacity. These benefits will continue under the new policy. Additionally, it may include lower interest rates on EV loans, incentives for scrapping old vehicles, and financial assistance for charging infrastructure and battery swapping.
The draft policy proposes a separate levy on vehicles older than 10 years at the time of PUC (Pollution Under Control) certificate renewal. Officials estimate that this could generate approximately ₹300 crore annually, which will be used for EV adoption programs.
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Auto industry experts believe that simply increasing the cess will have a limited impact on the pace of EV adoption. They argue that the high initial cost of EVs remains the biggest hurdle. While tax changes may influence purchasing decisions to some extent, concrete and robust measures are necessary to accelerate the transition.
The draft EV policy will soon be released for public and stakeholder feedback. Following this, it will be sent for cabinet approval, after which the policy will be finalized.
