Delhi EV Policy 2.0: 2026-30 rules, ₹15,000 cr

Policy approval and July 1 rollout

Delhi’s Cabinet has approved the Delhi EV Policy 2.0, with the government stating it will come into effect from July 1. The policy is designed to speed up the shift to electric mobility and pairs registration restrictions with buyer incentives and a large charging build-out. A key change is that the policy moves beyond encouraging adoption and sets deadlines that limit new registrations of internal combustion engine (ICE) vehicles in the two-wheeler and three-wheeler categories. The announcement has also had an immediate impact on listed auto stocks, reflecting investor focus on how quickly demand may shift in the city. Alongside passenger and commercial mobility, the policy also sets mandatory electrification targets for school transport fleets. The government has linked the charging push to central schemes such as PM E-DRIVE and remaining assistance under earlier FAME allocations.

What changes for new registrations in Delhi

The policy lays down a phased transition for new vehicle registrations in the national capital. From January 1, 2027, only electric three-wheelers (e3Ws) and N1 category light commercial vehicles (LCVs) will be eligible for fresh registration in Delhi. N1 vehicles are goods vehicles with gross vehicle weight up to 3.5 tonnes. From April 1, 2028, only electric two-wheelers (e2Ws) will be eligible for new registration. The announcements have prompted concerns among traditional manufacturers about product plans and investment strategies, especially if other states adopt similar timelines.

The ₹15,000 crore headline allocation

At a press conference, Delhi Chief Minister Rekha Gupta said the policy has been allocated an investment of ₹15,000 crore. According to the government, ₹7,000 crore is earmarked for boosting EVs in the city over a four-year period through direct incentives. Another ₹8,000 crore is allocated towards EV infrastructure and tax exemptions over the next four years. This split indicates the policy’s twin approach: lower upfront cost for buyers and expand charging availability to reduce operational friction. The government’s stated budget numbers are central to how investors are reading the policy’s seriousness and execution capacity.

Buyer incentives for two-wheelers, three-wheelers, and LCVs

The policy offers time-bound incentives that reduce over the first three years. Buyers of electric two-wheelers will receive ₹30,000 in the first year, falling to ₹20,000 in the second year and ₹10,000 in the third year. For electric three-wheelers, the incentive is ₹50,000 in the first year, ₹40,000 in the second year, and ₹30,000 in the third year. Buyers of electric N1 category LCVs will receive ₹1,00,000 in the first year.

Some reporting around the draft version also described a battery-linked structure for eligible e2W buyers at ₹10,000 per kWh (capped at ₹30,000) in the first year, then ₹6,600 per kWh (up to ₹20,000) in the second year, and ₹3,300 per kWh (up to ₹10,000) in the third year. It also stated that the ex-factory price must not exceed ₹2.25 lakh to qualify, with disbursal through direct benefit transfer for Delhi residents with vehicles registered in Delhi.

Scrappage incentives to replace older vehicles

The policy introduces scrappage incentives intended to accelerate replacement of older vehicles. Owners scrapping old two-wheelers will receive ₹10,000. Scrapping incentives for three-wheelers and N1 category vehicles are set at ₹25,000 each. Owners scrapping Bharat Stage-IV or older four-wheelers will receive ₹1,00,000. These measures are meant to pair the registration restrictions with a financial push to move existing owners to EVs.

Road tax and registration fee exemptions, and the hybrid decision

For electric cars priced up to ₹30 lakh, the policy continues a 100 percent exemption from road tax and registration charges. One set of reports around the Cabinet-approved version said the government delivered a definitive verdict against extending tax concessions to strong hybrid cars, dropping a draft proposal of a 50 percent waiver after stakeholder consultations and retaining benefits only for EVs. Separately, other reporting around the draft policy described a 50 percent exemption for strong hybrids in the same price band and full exemption for EVs till March 31, 2030. What is consistent across the coverage is that EVs in the up to-₹30-lakh segment remain the principal beneficiaries, while EV cars above ₹30 lakh are not eligible for exemptions.

Charging network expansion to 32,000 points

A large part of the policy’s infrastructure plan is the proposal to set up 32,000 EV charging points across Delhi. The expansion is expected to be supported through the Centre’s PM Electric Drive Revolution in Innovative Vehicle Enhancement, which provides financial support for EV charging infrastructure. The policy also references any remaining assistance available under the earlier Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles programme and allocations under the Delhi EV Policy Budget. Execution of this charging plan is likely to be watched closely by EV OEMs and charging operators because it affects range anxiety and daily usability in dense urban travel.

School buses and other electrification targets

The policy sets mandatory electrification targets for the school transport fleet. Schools will have to ensure that at least 10 percent of owned or hired buses are electric within two years of the policy coming into force. This share must rise to 30 percent by the third year. These targets create demand visibility for electric bus manufacturers and fleet operators, and also raise requirements for depot and on-route charging capacity. The policy direction also aligns with broader pushes for electrification of fleets used by aggregators and delivery services mentioned in draft-policy coverage.

Market reaction: EV-linked names rise, legacy makers fall

The policy announcement triggered sharp moves in auto stocks on a weak market day. EV scooter-maker Ather Energy rallied 8 percent on Monday, even as broader sentiment was soft. In contrast, Royal Enfield-maker Eicher Motors fell about 4 percent and was among the top losers on the Nifty Auto index. Hero MotoCorp also declined around 4 percent. Maruti Suzuki was cited among top losers too, down about 4.6 percent in one report, reflecting market sensitivity to the policy’s stance on hybrids and the pace of electrification.

Key facts at a glance

Incentives summary

Why the policy matters for investors and the industry

The main market implication is the clarity of a deadline-driven transition in two large, high-volume categories: two-wheelers and three-wheelers. A restriction on new ICE registrations from 2027-28 changes the competitive map within Delhi and can influence OEM allocation decisions for supply, dealership focus, and marketing. The policy also uses multiple levers at once: upfront subsidies, scrappage payouts, and fee exemptions that lower the on-road price. On the infrastructure side, a 32,000-point charging plan, backed by central support mechanisms, matters because it can determine whether adoption continues beyond early adopters. And the school-bus electrification targets add an institutional demand stream that can support manufacturers and charging providers serving depots and routes.

What to watch next

Investors will track how the Transport Department operationalises the subsidy mechanism, including eligibility, application process, and timelines for direct benefit transfer. The pace and geography of charging-point rollout will be another key variable, especially for last-mile and two-wheeler users. Markets will also monitor whether similar registration timelines are considered by other states, as that would broaden the impact beyond Delhi. For companies, the near-term focus will be product readiness and capacity to meet demand in the e2W and e3W segments ahead of the 2027-28 deadlines.