The Delhi Cabinet has approved a new electric vehicle (EV) Policy that introduces purchase and scrappage-linked incentives across multiple vehicle segments, while envisaging approximately Rs. 150 billion (US$ 1.6 billion) of investment over the next four years to support electric mobility in the national capital.

The policy, which is expected to come into effect on July 1st, targets electric vehicles accounting for 95% of all new vehicle registrations in Delhi by 2027. The framework includes investments in charging infrastructure, battery charging and swapping networks, public transport electrification and supporting infrastructure.

Announcing the decision following the Cabinet meeting, Chief Minister Rekha Gupta said the policy would support the capital's transition towards cleaner mobility through a combination of infrastructure development, incentives and regulatory measures.

The new framework succeeds Delhi's 2020 EV Policy, which had been extended multiple times while the revised policy was being finalised. As previously reported, discussions on the successor policy focused on expanding charging infrastructure, strengthening the EV ecosystem, accelerating fleet electrification and refining the incentive framework before receiving Cabinet approval.

The government is expected to issue a detailed notification outlining the implementation roadmap, eligibility criteria, timelines and incentive structure. While the overall investment commitment has been announced at approximately Rs. 150 billion, detailed allocations across charging infrastructure, public transport, incentives and other programmes are expected to be specified in the notification.

Purchase and scrappage-linked incentives

A key element of the new policy is the introduction of purchase and scrappage-linked incentives designed to encourage owners to replace older and more polluting vehicles with electric alternatives.

Eligible buyers purchasing an electric passenger vehicle priced at up to Rs. 3 million after scrapping an eligible older vehicle can receive a benefit of up to Rs. 100,000, subject to the policy's conditions.

Electric cars will also continue to receive exemptions from road tax and registration charges, reducing the overall acquisition cost. Electric two-wheelers will be eligible for purchase incentives of up to Rs. 30,000 during the first year of the policy, with the benefit tapering in subsequent years. Buyers who scrap eligible older two-wheelers and replace them with electric models will also qualify for additional scrappage-linked incentives. Electric three-wheelers will be eligible for purchase incentives of up to Rs. 50,000 in the first year, alongside scrappage benefits for replacing eligible older auto-rickshaws.

The policy also extends financial support to eligible electric light commercial vehicles, which can receive incentives of up to Rs. 100,000.

Infrastructure expansion and electrification roadmap

Beyond consumer incentives, the policy proposes investments in infrastructure to support EV adoption.

The Rs. 150 billion investment programme over four years is intended to expand public and private charging infrastructure, support battery charging and swapping networks, electrify public transport and support the broader EV ecosystem. The policy also sets out a phased roadmap for the electrification of high-usage vehicle categories.

Under the proposed framework, only electric auto-rickshaws are expected to be registered in Delhi from January 1st, 2027. In addition, new registrations of petrol, diesel and CNG-powered two-wheelers are proposed to cease from April 1st, 2028. The revised policy maintains its focus on battery electric vehicles and does not extend incentives to strong hybrid vehicles.

Industry reactions

Automakers and industry stakeholders have responded to the policy, particularly its focus on battery electric vehicles, charging infrastructure development and scrappage-linked incentives. Tata Motors Passenger Vehicles stated that the policy provides long-term direction for the automotive industry and reinforces the principle that public incentives should support technologies that deliver environmental benefits.

"Delhi has once again demonstrated leadership in doing the right thing. By retaining ambitious electrification timelines for high-usage vehicle segments and focusing policy incentives on pure EVs, the Government has reinforced the principle that public support should benefit and accelerate technologies that deliver the maximum environmental benefit with zero emissions, this policy provides long-term direction for the industry, strengthens confidence in India's EV ecosystem and can serve as a benchmark for other states pursuing cleaner urban mobility," the company said.

Anurag Mehrotra, Managing Director of JSW MG Motor India, said the policy could influence mobility choices in the national capital while helping to reduce both air pollution and dependence on imported crude oil.

"This is a step in the right direction towards improving air quality, promoting cost-effective travel, and protecting national interests by reducing crude oil dependency. The incentive to promote the scrappage of older vehicles and their replacement with new EVs is also an important measure, as poorly maintained older vehicles are among the key contributors to vehicular pollution. The new Delhi EV Policy can serve as a pilot for other states and offer valuable insights for wider adoption and implementation," Mehrotra said.

Nirmal K. Minda, President of ASSOCHAM, said the proposed investment reflects the scale of commitment associated with the policy.

"The proposed investment of Rs. 150 billion towards strengthening the EV ecosystem, including charging infrastructure and incentives, reflects the scale of commitment required to accelerate the clean mobility transition, the policy has the potential to substantially reduce vehicular emissions while creating new economic opportunities and can serve as a model for other states to adopt similar clean mobility initiatives suited to their local needs," Minda said.

Sudarshan Venu, Chairman of TVS Motor Company, commented on the policy.

"We welcome the Delhi government's new EV policy, which is proactive and forward-looking. We are fully committed to developing sustainable mobility products and solutions to drive further EV adoption," Venu said.

Madhumita Agrawal, Founder and Chief Executive Officer of Oben Electric, said the policy addresses factors associated with EV adoption while providing greater clarity for consumers and manufacturers.

"The policy's focus on two-wheelers is particularly significant. Motorcycles form the backbone of personal mobility and represent the largest opportunity to accelerate electrification at scale. As cities such as Delhi advance their clean mobility ambitions, expanding the adoption of electric motorcycles will be critical to delivering meaningful environmental impact and making electric mobility accessible to a much larger base of riders. This also places greater responsibility on manufacturers to build electric motorcycles that can genuinely replace conventional motorcycles in terms of performance, reliability, safety and ownership experience," Agrawal said.

Narayan Subramaniam, Chief Executive Officer and Head of Design at Ultraviolette Automotive, said the proposed transition for two-wheelers and the emphasis on charging infrastructure could influence mobility patterns in the capital.

"We welcome Delhi's commitment to an all-electric two-wheeler future by 2028, which could reshape mobility in a city of its size in several ways. Price-agnostic consumer support is important because it does not penalise buyers seeking greater range, technology, performance or design, while the focus on charging infrastructure recognises energy as an integral part of the product rather than an afterthought. Clean technology represents the future direction of mobility, and Ultraviolette is working to make that transition compelling," Subramaniam said.

Awaiting implementation details

Delhi was among the first Indian states and Union Territories to introduce a dedicated EV policy in 2020, offering purchase incentives, road tax and registration fee exemptions while promoting charging infrastructure.

The new policy builds on those measures with a greater emphasis on long-term ecosystem development, infrastructure expansion and regulatory support, as EV adoption in the capital continues to grow. The policy is expected to be closely monitored by automakers, charging infrastructure companies, fleet operators, component suppliers and other stakeholders, as Delhi remains one of India's largest electric vehicle markets. The forthcoming notification is expected to provide greater clarity on implementation timelines, eligibility criteria and the measures that will shape the next phase of the capital's transition towards electric mobility.