Delhi Chief Minister Atishi has launched several significant policy initiatives ahead of the forthcoming assembly elections, including an extension of the city's Electric Vehicle (EV) policy until March 31, 2025. The move announced on Thursday, reinstates incentives and road tax exemptions for electric vehicle owners, signalling a fresh attempt to tackle air pollution in the nation's capital.
The EV policy, which had been stopped for several months, is being reinstated, with a focus on incentivizing the transition to electric vehicles. Atishi emphasized the city's progress in EV adoption, noting, "Currently, 12% of all registered vehicles in Delhi are electric, the highest proportion in the country and double the national average of 6%."
The policy extension is in response to the ongoing air quality issues in Delhi and adjacent regions. Subsidies and road tax exemptions will apply to EVs purchased after January 1, 2024. This initiative seeks to bring back momentum in the EV sector, which had stagnated following the termination of subsidies earlier this year.
The Delhi government has announced specific subsidies under the EV policy, such as Rs. 5,000 per kWh of battery capacity for two-wheelers (up to Rs. 30,000) and Rs. 30,000 per vehicle for three-wheelers. These incentives are expected to mitigate some of the concerns slowing EV adoption, such as high upfront costs, range anxiety, and battery life uncertainties.
"From 2019-20, when EVs accounted for less than four percent of vehicle registrations, the proportion has climbed to 12% by the end of FY 24. However, over the previous ten months, the EV subsidy scheme has been stopped, affecting sales," Atishi stated. She attributed the policy standstill to political upheavals, emphasizing the importance of restoring consumer confidence.
Despite Delhi's progress, the Indian electric vehicle sector faces significant difficulties. There are just 12,000 public charging stations nationally, compared to 87,000 petrol outlets, which remains a considerable hurdle. Furthermore, concerns about EV resale value, battery longevity, and greater upfront expenses have made traditional fuel vehicles a more compelling option for some customers.
Recent data confirms these concerns, with electric car sales in the first four months of FY25 hitting 29,500 units, indicating a decline in growth. A 3% year-on-year dip in EV sales in July 2024 emphasizes the necessity for strong regulatory actions to maintain market momentum.
In addition to the EV policy amendments, the Delhi cabinet granted Rs. 17 crore for the Delhi Scheduled Castes and Tribes, Other Backward Classes, Minorities, Safai Karamcharis, and Handicapped Financial and Development Corporation (DSFDC). The funds will be used to pay delayed employee salaries, resolving a long-standing financial crisis inside the business.
The Delhi government's renewed drive for EV adoption is consistent with its larger aim of improving air quality and transitioning to sustainable urban mobility. By reintroducing financial incentives and expanding the EV policy, the administration hopes to strengthen Delhi's position as India's leading EV market while also addressing significant customer concerns. The policy is expected to play an important role in influencing the city's transport scene until 2025 and beyond.
