With its emphasis on “scrappage first”, Delhi’s draft EV Policy 2026 could set the ball rolling for other states that are looking for sustainable mobility, such as Maharashtra, Uttar Pradesh, and Haryana – home to some of the country’s most polluted cities.

EV Hubs

EV hubs such as Karnataka, Tamil Nadu, and Gujarat may also see it as the next step in policy evolution, shifting from adoption incentives alone to targeted interventions.

By making scrappage a prerequisite for incentives, the policy ensures that high-emission vehicles are actively removed from the road while EV adoption increases at the same time. This creates a more meaningful environmental impact compared to policies that only focus on new vehicle sales

– Vijay Gond, Co-Founder and CEO of PeakAmp, a battery circularity company

Currently, EV penetration in India is somewhere around 7%-8% of the auto market, but the country aims to increase this figure to 30% by 2030.

The capital’s draft EV Policy 2.0 has two first-of-its-kind conditions, which experts say could be replicated in other states. One is the "scrappage-first" approach, linking incentives to the discarding of older, polluting BS-III and BS-IV vehicles.

Second is the phasing out of internal combustion engine (ICE) two-wheelers and three-wheelers.

“Other states can look at this model as part of a broader EV transition strategy. States with large vehicle populations or high urban pollution levels could adopt similar mechanisms where incentives are tied to the replacement of older vehicles,” Gond said.

It may serve as a guide to Maharashtra, Uttar Pradesh, and Haryana. These states have EV policies focused on accelerating EV adoption, creating a manufacturing hub, and improving charging infrastructure.

“We believe such scrappage-linked frameworks can accelerate India’s electrification journey and should be adopted across states to drive a more unified, demand-led transition towards sustainable mobility,” said Mohal Lalbhai, Founder & Group CEO of Gujarat-based MATTER Motor.

Scrappage-First Approach

Earlier, Delhi used to give financial incentives for new EV purchases. The draft EV Policy 2.0, however, aims to combat pollution at its source, namely the ageing ICE vehicles that continue to ply on the capital’s roads.

According to the International Energy Agency (IEA), road transport currently accounts for 20%-30% of urban air pollution in India.

Under the draft policy, the government has introduced incentives linked to the scrappage of older ICE vehicles when purchasing new electric vehicles. For electric two-wheelers (E2W), a scrapping incentive of ₹10,000 will be provided if the new vehicle is purchased within six months of scrapping the old vehicle.

This incentive would be ₹25,000 for electric three-wheelers (E3W), and ₹1 lakh for passenger electric cars, provided the ex-factory price does not exceed ₹30 lakh. For electric four-wheeler (E4W) goods carriers, the incentive amount is ₹50,000. 

Phasing Out ICE Vehicles

The government has also come up with a plan to stop new registrations for ICE two-wheelers and three-wheelers.

From 1 January 2027, new registrations will be permitted only for the L5 category of E3Ws – which means ICE three-wheelers won’t be allowed.

Similarly, only E2Ws shall be permitted for new registration from 1 April 2028.

This policy will significantly benefit the cab and three-wheeler industry, an integral part of the state's mobility ecosystem, by significantly reducing their daily operating costs after transitioning to electric

– Raman Bhatia, Managing Director, Servotech Renewable Power System

Replicating Delhi’s draft policy, however, may be easier said than done.

Challenges Ahead

It would require significant fiscal support and the development of a robust vehicle scrappage ecosystem, both of which remain a work in progress.

The financial implications are substantial. Scrappage-linked incentives demand sustained public funding, which may strain state budgets.

“Replicating it across other states will not be straightforward, primarily due to structural and behavioural differences. Delhi, being geographically compact, allows for faster infrastructure deployment and tighter policy enforcement. In contrast, larger states face higher capital requirements to build widespread charging networks, making financial viability a key challenge,” Bhatia said.

Consumer behaviour is another critical factor. In many regions, older vehicles remain economically viable, and incentives alone may not be enough to make them give these up.

“Delhi benefits from relatively higher purchasing power, allowing for faster EV adoption, whereas in many states, upfront cost sensitivity remains a barrier despite incentives,” Bhatia said.

“Additionally, long-standing reliance on petrol and diesel vehicles continues to influence buyer preferences, especially in regions where ICE ecosystems are deeply entrenched,” he said.

After the draft policy came out, all stakeholders, including the general public, were invited to submit their feedback within 30 days.

EV Registrations

EV registrations have been steadily growing in Delhi, having risen from 83,512 in 2024-25 to 1.07 lakh in 2025-26, according to the Vahan Dashboard of the Ministry of Road Transport and Highways.

Delhi is one of the most polluted cities in the world. Its air quality index (AQI) regularly breaches the 400-mark in winters, putting it in the severely polluted category.

The new draft EV policy marks a shift from simply adding electric vehicles to actively replacing the most polluting ones, reframing the EV transition as both a climate move and a public health intervention.

Whether other states converge on this model will depend on their ability to balance fiscal capacity, infrastructure readiness, and consumer incentives.