Flaws diverting Delhi’s draft EV policy

The Delhi government’s Draft Electric Vehicle (EV) Policy 2026-2030, recently released for public consultation, marks a decisive shift from a voluntary, incentive-driven approach to legally binding, registration-level prohibitions.

Accordingly, from 1 January 2027, Delhi will allow new registrations only for electric three-wheelers. The same rule will apply to two-wheelers from 1 April 2028. The scale of ambition is clear. The structural capacity to deliver it is not.

The draft policy’s incentive architecture creates the first significant tension. Purchase incentives are provided for electric two and three-wheelers, as well as electric four-wheeler goods vehicles, on a declining year-wise basis under clauses 4.2.2, 4.3.1 and 4.4.1, respectively.

However, no direct purchase incentive exists anywhere in the policy for private electric cars. The only fiscal support for cars is road tax and registration fee exemption until 31 March 2030, under clause 4.7.2.

This grants 100% exemption to pure electric cars and 50% exemption to strong hybrid EVs, both capped at an ex-showroom price of INR3 million (USD31,000). The scrapping incentive of INR100,000 per vehicle (USD1037) – limited to the first 100,000 eligible applicants – is the only other instrument available.

For the mass-market car segment, this represents a narrow and contingent fiscal signal. The 50% road tax exemption for strong hybrid EVs compounds the problem.

A buyer choosing a strong hybrid over a pure EV in the same price band is not merely a lost sale, it represents lost demand-side momentum toward the policy’s electrification deadlines.

The mandate design also raises a more immediate concern. Clause 8.1.1 imposes an absolute registration ban on non-electric three-wheelers from 1 January 2027, giving industry about eight months from notification.

Clause 6.1 additionally places the entire supply obligation on original equipment manufacturers, requiring them to ensure adequate and timely supply, but contains no market monitoring mechanism, no trigger for mandate revision if supply falls short, and no force majeure provision.

A mandate without a supply contingency is not a policy instrument, it is a liability waiting to be challenged. The two-wheeler incentive schedule makes the structural misalignment explicit: incentives decline from year 1 to year 3, and disappear entirely in year 4. Since the mandate takes effect in year 3, the draft policy asks the market to comply most rigorously as it withdraws the most support.

The gig worker financing gap is where the draft policy’s ambition most visibly outruns its design.

Platform aggregators operate on an asset-light model; the capital cost of transition falls entirely on individual driver-partners. No financing support mechanism, interest subvention or credit guarantee exists anywhere in the draft policy.

Without targeted financing intervention, the mandate risks contracting the driver pool precisely when the draft policy requires the fleet to expand. It mandates transition, but does not fund the means for most economically vulnerable participants to achieve it.

The EV Fund and the charging infrastructure mandate share the same structural deficiency: both create obligations without the architecture to discharge them. The EV Fund’s revenue sources are permissive; its allocation across purchase incentives, scrapping incentives, infrastructure and gig-worker financing is undefined; and its governing Apex Committee has had composition and terms of reference deferred.

The charging mandate requires all new civil infrastructure projects of Delhi departments and local bodies to be EV-charging-ready, but specifies no minimum electrical load capacity, no parking-bay percentage, no sub-metering requirement and no fire safety norm.

While the draft policy is directionally correct, Delhi needs binding electrification mandates, not voluntary targets. The architecture is not yet equal to the ambition. The mandates will hold only if supply contingency mechanisms, force majeure provisions and financing support are built in.

The EV Fund additionally requires a codified allocation framework and a simultaneously notified governance structure. Without these, the policy risks institutional failures. The question is not whether this policy should exist, but whether it can deliver what it promises.

Abhishek Tripathi is the managing partner and Ashutosh Senger is a counsel at Sarthak Advocates & Solicitors