How New EV Policy in Delhi Will Inform Urban Mobility and the Economics of Electric Transport

Delhi's ambitious Electric Vehicle Policy 2.0 represents a promising mobility transitions. The draft policy proposes measures including subsidies of up to Rs. 36,000 for women purchasing electric two-wheelers, a complete ban on new CNG auto-rickshaw registrations from August 15, 2025, and a prohibition on all petrol, diesel, and CNG two-wheelers from August 15, 2026. 

In an innovative approach to sustainable mobility, the government will offer retrofitting incentives of Rs. 50,000 for the first 1,000 car owners who convert their petrol or diesel vehicles into electric ones, alongside Rs. 35,000-40,000 incentives for two-wheeler conversions. Targeting 20,000 new jobs and an expansive charging network, the policy aims to ensure that 80% of new vehicle registrations are electric by 2026. 

Dinesh Arjun, Co-founder of Raptee.HV, observes, “The updated Delhi EV Policy makes EV adoption feel far more tangible and inclusive. By focusing on women buyers who are already driving e-scooter adoption, clearly prioritising electric two-wheelers (including motorcycles), and encouraging retrofitting through incentives, the policy addresses both new and existing users.”

India's State-Level EV Race and Public Transport Transformation

Whilst Delhi positions itself as a frontrunner, India's EV landscape reveals varied approaches. Maharashtra emphasises manufacturing incentives whilst Karnataka leverages its technology hub status.

Mukesh Gupta, Co-Founder and CMO of MaxVolt Energy Industries Limited, notes, “Compared with other states such as Maharashtra and Karnataka, the focal point of the Delhi EV policy is on urban centres and charging infrastructure located within the city. Maharashtra is known for placing strong emphasis on manufacturing-related incentives, and Karnataka is helping support innovation and entrepreneurs. The strength of the Delhi EV policy lies primarily in its aim to stimulate consumer adoption of EVs. This level of differentiation at the state level helps brands like ours determine market prioritisation and deployment strategies.”

Arjun elaborates, "The main difference is that Delhi’s EV policy is strongly demand-led, with direct, targeted incentives for everyday users especially two-wheelers, women buyers, and even existing ICE vehicles through retrofitting. Other states tend to focus more on infrastructure, manufacturing, or usage benefits, whereas Delhi prioritises accelerating immediate consumer adoption.”

Public transport electrification forms a crucial pillar. The Delhi Transport Corporation aims to deploy 7,000 electric buses by November 2026, achieving complete fleet electrification by 2027. E-rickshaws and electric three-wheelers receive unprecedented attention, with incentives of up to Rs. 45,000 for electric auto-rickshaws replacing CNG vehicles. 

Ramesh Kumar, a CNG auto-rickshaw driver in Nehru Place, expresses concern, stating, "The subsidy helps, but I worry about charging (infrastructure) in my area. Where will I charge during peak hours?" However, Kuldeep Sharma, who switched to an e-auto six months ago, shares "Initially I was nervous, but the running costs are half of what I spent on CNG. I save around Rs. 150 monthly, which makes a real difference."

Profitability Meets Policy And The Economics of Adoption

Delhi registered 82,081 EVs in 2024, reflecting 30% growth from 2022, yet awareness gaps persist. The draft policy offers women a purchase incentive of Rs. 1,20,000 per kilowatt-hour, capped at Rs. 36,000, available to the first 10,000 women holding driving licences. For general buyers, incentives of Rs. 10000 per kWh (capped at Rs. 30000) are proposed. 

Gupta acknowledges that whilst "increased awareness of the cost of EV ownership has been achieved through subsidies for EV purchases and tax waivers," for many consumers "the cost of ownership remains unclear, and there is a significant gap in understanding how to access and navigate incentives." He adds that "incentives are supporting the growth of demand for electric vehicles from a brand perspective; however, gaps in knowledge about the EV incentive programme, limited access to financing, and concerns about charging availability remain barriers to consumers when making their purchasing decisions."

Akshit Bansal, Founder and CEO of Statiq adds, "Single-window approvals and transparent subsidy portals demystify processes for regular buyers, e.g., Delhi's Rs. 35-40k two-wheeler aid covers 25-30% upfront cost. For brands like Statiq, it unlocks profitable investments in 15,000+ AC points and battery recycling, translating to scalable revenue from fleets, though awareness campaigns and last-mile charging access must bridge persistent gaps. Hyperlocal efforts, as in South India, prove effective in building trust."

Meera Kapoor, a software engineer who plans to purchase an electric scooter soon after the implementation, says, "The subsidy has made the decision much easier for me. But understanding what documents I needed took considerable research. The government needs a simpler application process." For delivery partners, the economics are transformative. Anjaneya Verma, who delivers food orders in South Delhi and plans to change to an EV soon, shares "I switched to an electric scooter three months ago. The subsidy will reduce my upfront cost significantly, and now I will save Rs. 8,000 per month on fuel.”

Beyond Adoption And Building a Sustainable Ecosystem

Whilst adoption metrics tell an encouraging story, long-term sustainability hinges on addressing environmental challenges. Retrofitting, which replaces internal combustion engines with battery-operated electric kits, offers a circular approach but raises questions about battery lifecycle management. 

Arjun notes that whilst "Delhi's EV policy is positively impacting the wider transport ecosystem through faster public transit electrification, which will directly help improve air quality," he stresses that "whilst adoption is well addressed, end-of-life sustainability needs stronger policy focus. A clearly defined and well-enforced battery recycling and lifecycle management framework is essential to ensure the EV transition remains environmentally sustainable, not just adoption-led."

Dr Ravi Chopra, an senior environmental scientist, emphasises the urgency of comprehensive planning, stating "The retrofitting initiative is innovative, allowing owners to retain their vehicles whilst reducing emissions. However, we must establish robust infrastructure for managing both new and retrofitted vehicle batteries. Lithium-ion batteries contain valuable materials like cobalt and nickel that must be recovered responsibly. Without mandating producer responsibility and investing in battery recycling facilities now, we risk creating a different environmental crisis as thousands of batteries reach end-of-life."

Gupta from MaxVolt Energy echoes these concerns, noting that "the key to ensuring the environmentally responsible use of EVs lies in establishing stronger policies regarding battery reuse, creating a supporting infrastructure for recycling, and holding EV producers accountable for their battery-related responsibilities." 

Bansal from Statiq expands on this, "Delhi’s new EV Policy 2.0 is revolutionizing our transport ecosystem by fast-tracking public transit electrification—all new buses tendered post-2026 must be electric, targeting 10,000 e-buses by 2030, and promoting Gramin Sewa e-vans for seamless last-mile connectivity, and mandating up to 2.5 GWh of Battery Energy Storage Systems (BESS) to bolster grid stability while dramatically cutting PM2.5 emissions by an estimated 25% in high-density zones through scrappage of 50,000+ old vehicles. We're addressing battery lifecycles through rigorous scientific disposal and recycling protocols, yet stronger reverse logistics for e-waste is critical to curb environmental harm. By equalizing the EV prices to that of petrol-diesel vehicles, we will enable the mass adoption, democratizing green mobility across all levels."

Delhi's electric revolution is undoubtedly underway, driven by unprecedented incentives for women, commercial operators, retrofitting enthusiasts, and households alike. Yet the road ahead requires not merely vehicles and charging stations, but a comprehensive ecosystem ensuring India's mobility transformation remains truly sustainable.