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Strong Incentives and Mandated Transition to Accelerate EV Adoption

* The Delhi Cabinet approved EV Policy 2.0, effective July 01, 2026 to March 31, 2030, with a planned investment of INR 150 Bn over FY27–30, including INR 70 Bn towards purchase incentives and INR 80 Bn for charging infrastructure, tax benefits and EV ecosystem development.

* The policy provides attractive demand incentives of up to INR 30,000 for electric two-wheelers, INR 50,000 for electric three-wheelers and INR 100,000 for electric light commercial vehicles (N1 category), along with 100% exemption on road tax and registration charges for electric cars priced up to INR 3 Mn.

* To accelerate fleet replacement, the government has announced scrappage incentives of up to INR 100,000 for older passenger vehicles, INR 50,000 for N1 commercial vehicles, INR 25,000 for three-wheelers and INR 10,000 for two-wheelers. The policy also mandates that only electric three-wheelers can be newly registered from January 2027, while new petrol/CNG two-wheelers will no longer be registered from April 2028. Additionally, around 32,000 EV charging points are planned across Delhi.

Our View:

* The policy is a strong positive for India's EV ecosystem as it combines attractive purchase incentives, mandatory electrification timelines and significant investment in charging infrastructure. We believe the policy will accelerate EV adoption, particularly in the 2W, 3W and passenger vehicle segments, while creating long-term opportunities for OEMs with established EV portfolios and auto ancillary companies involved in EV powertrain, battery systems and charging infrastructure. If replicated by other large states, Delhi's EV Policy 2.0 could become a key catalyst for faster nationwide EV penetration and localisation.

* Beneficiaries as per our coverage: TVSL, BJAUT, M&M, UNOMINDA, MINDACORP, MSUMI.

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