New Draft Policy: Hybrid Relief and Phased Shift to Electric Mobility

The Delhi government has introduced a draft Electric Vehicle (EV) Policy 2.0 that aims to transform 95% of all newly registered vehicles in the capital into electric models by 2027. The proposed framework introduces a phased shift toward electric mobility, including the gradual elimination of fossil fuel-powered vehicles and a targeted transition for three-wheelers by 2027.

A central component of the draft policy is the introduction of significant tax incentives to lower the cost of adoption for consumers. The proposal includes a 100% tax exemption for electric cars priced under ₹30 lakh. Battery electric vehicles (BEVs) with a price of ₹20 lakh or below are eligible for complete waivers on road tax and registration fees.

Expansion to Hybrid Vehicles

In a departure from previous strategies that focused exclusively on BEVs, the draft EV Policy 2.0 expands its scope to include hybrid vehicles. This includes both Strong Hybrid Electric Vehicles (SHEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) as part of the city’s clean mobility strategy.

Under the proposed guidelines, hybrid vehicles with an ex-showroom price of up to ₹20 lakh would be eligible for full exemptions on registration fees and road tax. Other reports indicate the draft proposes a 50% relief for hybrids as part of the phased transition.

The implementation of these incentives for SHEVs and PHEVs is contingent upon official categorization by relevant national authorities, specifically the Ministry of Road Transport & Highways or the Ministry of Heavy Industries.

Transition and Restrictions on ICE Vehicles

The policy outlines a strict timeline for reducing the presence of internal combustion engine (ICE) vehicles. Beyond the 2027 goal for new registrations, the draft specifically targets the three-wheeler segment for a transition to electric power by 2027.

The draft policy also proposes a gradual phase-out of CNG-run auto-rickshaws, a primary mode of transport in the capital. According to the draft, no new CNG auto-rickshaws would be permitted for registration.

Cabinet Clarifications and Policy Extension

Following concerns regarding the impact of the draft policy on livelihoods, particularly for those dependent on auto-rickshaws, the Delhi cabinet held discussions on the nuances of the proposal. In a meeting chaired by Chief Minister Rekha Gupta, the cabinet decided to continue the existing EV policy for an additional three months.

The Delhi government clarified that no existing auto-rickshaws will be banned, seeking to address misinformation regarding the complete discontinuation of the fleet. The government indicated that the draft EV policy may be further tweaked to better incorporate the concerns of the population dependent on these vehicles for travel and income.

During the same session, the cabinet approved the continuation of the existing power subsidy for four specific categories:

• Domestic consumers
• Farmers
• Lawyers with chambers
• Victims of the 1984 anti-Sikh riots

Social Targets and Industry Concerns

The draft policy emphasizes a gender-inclusive approach to transport, featuring targeted subsidies and a specific focus on promoting electric mobility among women.

While the inclusion of hybrids has been seen as a way to encourage voluntary transition, some industry experts have expressed concern. There are fears that providing tax perks for hybrid vehicles could slow the progress toward full electrification and potentially dampen investments in BEV technology if other states follow Delhi’s precedent.