Amid Rising AQI Levels, Delhi's EV Policy 2.0 Set To Offer Big Incentives To Consumers

On the cards are large subsidies and incentives for both manufacturers and consumers as the Rekha Gupta-government implement various measures to address the air pollution crisis. Along with this, the government may even announce an early phasing out of diesel vehicles.

The draft policy plans to provide a subsidy on two-wheelers ranging between ₹35,000 and ₹40,000. This initiative focuses on daily commuters, especially the middle-class, for whom the high cost of EVs remains a barrier.

According to sources, the draft policy, which will be available in the public domain in the first week of January 2026, plans to provide relief for commercial vehicle owners shifting to EVs.

Last-Mile Connectivity

The Delhi government is also looking to boost last-mile connectivity with a model similar to Gramin Sewa, wherein it may deploy electric vans near bus stands and metro stations across the city.

To reduce tailpipe emissions, the government is also mulling a programme through which individuals may receive incentives for converting their vehicles into electric ones, provided they are priced up to ₹20 lakh.

Micro Mobility Vehicle manufacturer Yulu lauded the upcoming EV policy and said that it is an important commitment to cleaner urban transport at a time when air quality demands urgent action.

Internal combustion engine vehicles are major contributors to air pollution. According to an estimate, over 50% of pollution comes from vehicles, making it difficult to breathe in the city.

Speaking to The Secretariat, Samrath S. Kochar, Founder and CEO at Trontek Electronics, said that Delhi’s upcoming EV Policy 2.0 is a crucial step toward tackling growing air pollution in the city.

EV Subsidies, Charging Infrastructure

“By focusing not only on EV subsidies but also on charging infrastructure, battery recycling, and the scrapping of old polluting vehicles, the policy takes a more practical and long-term approach. For the EV industry, this brings much-needed clarity and confidence,” he said. 

“Such measures will help the industry scale responsibly while supporting Delhi’s shift toward cleaner and more sustainable mobility,” Kochar added.

Urban Air Pollution

Arjun Sinha, Partner at AP & Partners, said that this was needed as transport emissions were one of the key contributors to urban air pollution, and an area where regulatory intervention can deliver results.

“While the EV Policy is important, it needs to be seen in context. Air pollution cannot be tackled through EV adoption alone. Transport is a significant contributor, but not the only source,” Sinha added.

As the policy takes shape, there's an opportunity to amplify its impact by weaving in shared electric mobility as a core strategy. In space-constrained cities like Delhi, complementing private EV ownership with robust shared mobility options can address multiple challenges simultaneously, from reducing congestion, democratising access to clean transport, and making efficient use of limited urban space.

Cleaner Transport Options

“This approach becomes especially relevant given the CAQM's Directive 94, which mandates food delivery and e-commerce platforms to adopt cleaner transport. For Delhi's EV policy to maximise its effectiveness in meeting air quality targets, it could consider explicitly integrating shared mobility operators into its framework. Provisions starting with recognising Low-Speed Electric Vehicles (LSEVs) in the EV fleet conversion targets, coupled with incentives for businesses transitioning to and supporting the transition to shared fleet, would accelerate the clean transport transition considerably,” R.K. Misra, Co-founder and president, Yulu, said.

Meanwhile, in a recent press conference, Delhi Transport Minister Pankaj Kumar Singh said that the government will introduce close to 1,500 e-buses by March 2026, and this number will rise to 7,000 by November 2026.

“3,518 e-buses have been introduced in the city since the BJP came into power. Our goal is to increase this to over 5,000 by March 2026 and over 7,000 by November 2026,” Singh said.

Charging station installation remains a major challenge for the industry, posing a limitation to the adoption of EVs. According to the Ministry of Heavy Industry, India has a total of 29,277 charging stations, with Delhi ranking fourth, having 1,967 charging stations.

Karnataka tops the list with over 6,000 charging stations across the state, followed by Maharashtra with 4,155.

Delhi’s EV Policy Compared With Other States

As per the Delhi EV Policy 2020, scrapping and de-registering old ICE two-wheelers attracts a ₹5,000 incentive. This incentive is ₹7,500 for auto-rickshaws. The purchase incentive has been kept between ₹5,000 and ₹30,000, depending on the category of the vehicle.

On the other hand, Karnataka introduced its Clean Mobility Policy 2025–2030 with a proposed investment of ₹50,000 crore, offering multiple subsidies and incentives across the industry.

The policy offers capital subsidies of up to 25% statewide, with Bengaluru regions eligible for 20% support.

Building on its 2017 EV policy, Karnataka plans to expand its charging infrastructure by adding 2,600 stations to its existing network of 5,403 stations, which currently serve over 2,50,000 registered electric vehicles.

Meanwhile, Maharashtra has approved a budget of ₹1,993 crore under its recent policy, to be implemented over the next five years.

Tax Exemption For EVs

Under this policy, all EVs registered in Maharashtra will be exempt from motor vehicle tax and registration fees.

In addition, buyers will receive a subsidy of 10% to 15% on E2-Ws, E3-Ws, and E4-Ws. The policy also offers a 15% subsidy on electric cargo vehicles, light commercial vehicles, and tractors.

Sameer Moidin, Founder & CEO of EVeium Smart Mobility, said that the proposed policy signals a serious shift in how Delhi is choosing to confront air pollution, not with incremental nudges but with scale and intent.

“A well-designed policy can help build trust among consumers who still worry about range, charging access, and resale value. For EV brands, this is an opportunity to invest deeper in localisation, better products and stronger after-sales networks, knowing that the ecosystem is finally aligning with the urgency of Delhi’s air quality challenge,” he said.

How Did China Make EV Adoption Successful?

China produces around 70% of the global electric vehicles. In 2024, a total of 17.3 million electric cars were produced globally. 

Despite not being the first EV manufacturing country in the world, China managed to take the lead through a host of measures that included regulatory mandates and subsidies. The country focused on investments in boosting charging infrastructure, which gave a push to consumers. Investing in purchase incentives is very common in every policy; China initially invested in charging infrastructure that worked as the foundation for the upcoming policies and framework for countrywide adoption.

According to a research paper published by the Penn Institute for Economic Research (PIER) in February this year, China’s push for EV adoption coincided with the expansion of High-Speed Rail (HSR).

Regions with the fastest and most accessible rail networks also saw the highest increases in EV sales. Overall, they note, high-speed rail boosted EV sales volume by an average of 91%.

The researchers conclude that this strategy of complementary infrastructure is more effective than EV subsidies or mandates alone.