According to a report by Crisil Ratings, the two-wheeler segment presents greater difficulties for Delhi's recently approved electric vehicle policy. This policy mandates a ban on registering vehicles and scooters with traditional engines starting from April 2028, yet the penetration of electric models in this segment in Delhi during the 2026 financial year was only 7.3%.
Punam Upadhyay, Director at Crisil Ratings, told PTI that the requirement to register only electric vehicles from April 2028 provides a clear roadmap for the two-wheeler industry to accelerate investments in electric products, manufacturing capacity, and distribution. Nevertheless, internal combustion engine (ICE) models are expected to remain relevant in the near term.
Upadhyay noted that the future growth of the two-wheeler market in Delhi will increasingly depend on the readiness to adopt electric vehicles. She commented on the implications of this policy for ICE manufacturers, particularly in the two-wheeler category.
She stated that the impact on ICE manufacturers will vary depending on the segment. In the two-wheeler segment, the transition is expected to be gradual, as electric vehicles accounted for only 7.3% of total registrations in Delhi in FY 2026. Despite registrations growing by approximately 25% to 5.7 lakh units in FY 2026, the share of electric vehicles remained low.
Under the policy framework, all new registrations of two-wheelers must be electric starting from April 2028. This will be supported by incentives of up to ₹30,000 per vehicle in the first year, which will gradually decrease over the next two years.
Although the policy includes subsidies for scrapping old vehicles and tax exemptions, Upadhyay emphasized that as financial support decreases, price competitiveness and total cost of ownership will become increasingly important factors in sustaining the growth of EV popularity.
Unlike two-wheelers, passenger cars are undergoing a more measured evolutionary process. The policy does not mandate only electric registration for private cars; instead, it relies on incentives to encourage their adoption.
Consequently, ICE vehicles are expected to remain relevant in the medium term, with electrification rates being determined by factors such as vehicle cost, charging convenience, and model availability.
In FY 2026, about 2 lakh four-wheelers were registered in Delhi, including nearly 77,000 electric vehicles (representing 39% penetration) and around 52,000 hybrids. According to the policy, all electric passenger vehicles registered in the national capital with a price up to ₹30 lakh at the showroom receive a 100% exemption from road tax and registration fees.
Upadhyay added that among all vehicle segments, three-wheelers will face the earliest change, as the mandatory electric registration is scheduled for January 1, 2027. However, the success of this transition will depend on sufficient vehicle supply, access to financing, as well as charging and battery replacement infrastructure.
In FY 2026, electric vehicles constituted almost two-thirds of the 55,700 registered three-wheelers. Overall, Delhi's EV policy marks one of the most ambitious state-level initiatives in India aimed at accelerating electric mobility through a combination of registration mandates, targeted fiscal incentives, and a clear preference for clean EVs over hybrids.
The Delhi government has approved a new policy regarding electric vehicles (EVs) aimed at accelerating the adoption of electric cars in the capital. This policy was approved at a Delhi Cabinet meeting on Monday chaired by Minister Leha Gupta.
The new policy is expected to come into effect on July 1st. The government plans to allocate approximately 15,000 crore rupees over the next four years to stimulate the use of electric vehicles and improve related infrastructure. These funds will be used to increase demand for EVs and develop the corresponding infrastructure.
Minister Leha Gupta stated at a press conference that this policy is a historic event for Delhi. She specified that the policy will be effective from July 1, 2026, and will run until March 31, 2030. The main goal is to make Delhi a pollution-free city, and the plan for achieving this goal is phased over the next four years.
Gupta reported that out of the total budget of 15,000 crore rupees, 7,000 crore rupees will be directed towards the EV policy itself, and another 8,000 crore rupees will go towards EV infrastructure development and subsidies. The policy includes an annual waiver of road taxes, incentives for purchasing electric vehicles, improvement of charging infrastructure, and encouragement for scrapping old vehicles.
Gupta emphasized that Delhi is the only state in the country implementing such a large-scale policy to support electric vehicles. The policy covers all types of transport, including two-wheelers, three-wheelers, four-wheelers, M1 category trucks, and rural services, which will directly benefit the residents of Delhi.
According to the Delhi government data, approximately 33% of the city's pollution comes from commercial transport, and 46% from two- and three-wheelers. Special attention in this policy is given to these three categories, as they include small M1 category trucks weighing up to 3.5 tons, with the aim of transitioning the existing fleet to EVs.
Under the new policy, buyers of electric motorcycles will receive a subsidy of 30,000 rupees in the first year of ownership.
