Delhi EV Policy 2.0: Auto Industry Advocates for Phase-Out of Older Two-Wheelers
The current Delhi Electric Vehicle (EV) policy, which provides various incentives for electric two-wheelers, is set to expire on June 30, 2026. During this period, customers can continue to benefit from subsidies, including purchase incentives and a complete waiver of road tax and registration fees for eligible electric vehicles. The automotive industry has expressed hope for a smooth transition to the upcoming Delhi EV Policy 2.0, which is slated to be finalized soon. The new policy, proposed to last until March 31, 2030, is expected to introduce stricter regulations, including a potential ban on new petrol two-wheelers by April 2028, and aims to promote the phasing out of older, polluting internal combustion engine (ICE) vehicles.
For the common citizen, the continuation of existing subsidies until June 30 could provide financial incentives for individuals considering the switch to electric two-wheelers. This transition is vital for achieving both environmental goals and a reduction in air pollution, particularly in a metropolitan area like Delhi, which confronts significant air quality challenges. However, industry leaders caution that a wholesale ban on modern BS-VI compliant ICE two-wheelers may lead to increased consumer distress, particularly among high-demand users, such as delivery personnel and long-distance commuters, who rely heavily on their vehicles for daily operations. With approximately 65% of two-wheeler sales in the region coming from these use cases, consumer welfare concerns need to be adequately addressed in policy design.
Looking ahead, the government and the Delhi Transport Department must carefully balance the goal of increasing EV penetration against the immediate needs of consumers and the automotive industry. The proposed EV Policy 2.0, while aimed at reducing pollution, should consider a phased approach to the registration of ICE vehicles, particularly modern ones that feature advanced emissions control technologies. Stakeholders like the Society of Indian Automobile Manufacturers (SIAM) have suggested that prioritizing the removal of older, polluting vehicles, rather than enacting blanket bans on new ICE registrations, could be a more effective strategy for improving air quality without compromising economic stability. Furthermore, continuous engagement with industry stakeholders during public consultations will be crucial to ensure thoughtful implementation of these regulations.
Source: The Hindu
(Expert Note: This report was independently prepared by the Wealthova Economy team.)