No tax break for strong hybrids, no petrol bikes in Delhi from Apr 2028 onward

The Electric Vehicle (EV) Policy approved by the government on Monday (June 29) has dropped the proposal to extend incentives to strong hybrid vehicles, and has instead focused entirely on promoting pure EVs.

The policy, which goes into effect from Wednesday (July 1), also mandates that only electric two-wheelers will be registered in Delhi from April 1, 2028, effectively phasing out petrol-run bikes in Delhi.

The draft policy had proposed that strong hybrid vehicles costing up to Rs 30 lakh ex-showroom be given a 50 per cent exemption on road tax and registration charges initially in order to bridge the transition to non-polluting cars as the capital built up its EV charging infrastructure.

The proposal had been backed widely by top institutes and consultants working to promote electric mobility, but had been opposed by critics who had argued in favour of investments in charging infrastructure and a push for the adoption of pure EVs.

The new EV Policy contains a 100% waiver of road tax and registration charges on all pure electric vehicles. For four-wheelers, the exemption will apply to vehicles with an ex-showroom price of up to Rs 30 lakh.

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Officials said EVs bought under the policy will not be allowed to be sold or registered in another state for a period of three years.

“This policy is only about promoting pure EVs,” Niharika Rai, principal secretary and commissioner of Delhi’s Transport Department, said.

A strong (or ‘full’) hybrid vehicle combines a traditional internal combustion engine with a powerful electric motor and a larger battery, which enables it to run entirely on electric power at low speeds, and to switch automatically to the engine for higher speeds.

A mild hybrid, by contrast, has a smaller electric motor and battery, and cannot run on electricity alone. The electric motor in mild hybrids acts only to boost acceleration and smoothen stop-start systems.

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Announcing the decision of the Delhi Cabinet, Chief Minister Rekha Gupta said on Monday that the EV Policy aims to help reduce the burden of air pollution in Delhi and to strengthen the city’s transport system, ultimately paving the way for the capital to emerge as a “smart” city.

“The draft policy was prepared after extensive consultations with stakeholders, with suggestions incorporated at every stage. The policy will now be sent to the Lieutenant Governor for approval and will come into effect from July 1. Residents purchasing vehicles in Delhi will be eligible to avail of the benefits under the policy,” Chief Minister Gupta said.

Gupta said that the government will spend Rs 15,000 crore on incentives and strengthening charging infrastructure.

To encourage the transition, the government has proposed purchase incentives of up to Rs 30,000 for electric two-wheelers in the first year, Rs 20,000 in the second year, and Rs 10,000 in the third year.

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For passenger three-wheelers (autos), the incentive will be Rs 50,000 in the first year, Rs 40,000 in the second year, and Rs 30,000 in the third year.

Buyers of “N1” electric trucks will be eligible for a subsidy of up to Rs 1 lakh in the first year. N1s are light commercial vehicles (LCVs) with a maximum permissible gross weight of up to 3.5 tonnes.

Citing a 2008 study, Rai said commercial goods vehicles accounted for 33% of vehicular pollution in the capital, while two- and three-wheelers contributed 46%. Nearly 80% of commercial goods vehicles operating in Delhi are in the N1 category, she said.

The policy also provides incentives for scrapping older vehicles. Owners scrapping BS-IV or older two-wheelers will receive Rs 10,000, while three-wheelers will be eligible for Rs 25,000 and N1 trucks, Rs 50,000.

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“Gramin Seva vehicles reaching the end of their operational life will receive a scrapping incentive of Rs 15,000. In addition, the first 1 lakh owners scrapping BS-IV or older four-wheelers will be eligible for a scrapping incentive of Rs 1 lakh,” Rai said.

The policy also provides a waiver of the Delhi entry fee for the first 1,000 electric N2 trucks (3.5-12 tonnes) purchased within three months of the policy being notified.

The policy also introduces mandatory EV adoption timelines. From January 1, 2027, only electric three-wheelers and N1 trucks will be registered in Delhi. From April 1, 2028, only electric two-wheelers will be eligible for registration in the Capital.

Schools will be required to convert at least 10% of their owned or hired bus fleet to electric within two years of the policy’s notification, 20% within three years, and 30% by March 31, 2030.

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To support EV adoption, the government has set a target of establishing 32,000 charging points across Delhi during the policy period through the PM E-Drive scheme and the Delhi government’s budget.

Officials said land has already been identified and charging infrastructure will begin coming up across the city in the coming months.

The government said this is the first EV Policy in Delhi to be backed by such a large investment aimed at tackling air pollution.