Delhi’s chronic air quality crisis has long been attributed in significant part to vehicular emissions. The Commission for Air Quality Management (CAQM), in its latest report ‘Identification of the Causes for Worsening AQI in Delhi NCR’ has identified vehicular emissions as the largest contributor (23% during winter) of air pollution in the National Capital Territory of Delhi¹. 

Against this backdrop, the Government of the National Capital Territory of Delhi (“GNCTD”), through its Transport Department, has notified the Delhi Electric Vehicle Policy 2.0 (“Policy 2.0”), superseding the Delhi EV Policy, 2020 (“2020 Policy”). Policy 2.0 takes effect from 1 July 2026 and remains in force until 31 March 2030, backed by an outlay of approximately INR 15,000 crore, and targets 30% electrification of Delhi’s registered vehicle fleet by the end of its term. 

FROM INCENTIVES TO MANDATES

Unlike the 2020 Policy, which relied mainly on purchase subsidies, Policy 2.0 adds a phased registration bar while retaining fiscal support:

Vehicles already on the road are permitted to complete their existing lifecycle, this mandate operates prospectively on fresh registrations and is not applying a ban on existing fossil-fuel vehicles.

FISCAL INCENTIVES AND INSTITUTIONAL ARCHITECTURE

The Policy combines demand-side fiscal incentives with an institutional framework intended to support the transition to electric mobility.

On the demand side, the Policy provides purchase incentives for electric two-wheelers ranging from INR 30,000 in the first year to INR 10,000 in the third year², and for electric three-wheelers ranging from INR 50,000 to INR 30,000 over the same period³. In addition, all electric vehicles with an ex-showroom price of up to INR 30 lakhs that are purchased and registered in the National Capital Territory of Delhi are exempt from payment of road tax and registration fees⁴.

To accelerate the retirement of older, more polluting vehicles, the Policy also introduces a scrappage incentive of INR 1 lakh for the purchase of a new electric car with an ex-showroom price not exceeding INR 30 lakhs. The incentive is available where a Delhi-registered Bharat Stage IV or older vehicle is scrapped at an authorised scrapping facility and the new electric vehicle is purchased within six months of the issuance of the Certificate of Deposit (CoD). The benefit is capped at the first 100,000 eligible applicants⁵.

Delhi EV Apex Committee, the High-Powered Committee and the EV Cell within the Transport Department have been vested with the function of overseeing the implementation of the Policy⁶. In addition, Delhi Transco Limited (“DTL”) has been designated as the nodal agency responsible for planning and facilitating grid integration for public charging and battery-swapping infrastructure⁷.

THE PARALLEL END-OF-LIFE VEHICLE LITIGATION

Policy 2.0 operates alongside the ongoing judicial proceedings concerning end-of-life (“EOL”) vehicles, which separately govern the continued use of older vehicles. While Policy 2.0 focuses on the registration of new vehicles, the use of older vehicles remains subject to judicial directions.

In 2015, the National Green Tribunal directed a blanket prohibition on diesel vehicles older than ten years and petrol vehicles older than fifteen years from plying in the NCR region of Delhi⁸. The Supreme Court subsequently affirmed this age-based prohibition in the case of M.C. Mehta⁹. Pursuant to these directions, the GNCTD issued guidelines in 2024 providing for the impounding and scrapping of EOL vehicles.

The validity of the age-based prohibition was subsequently revisited, as the GNCTD contended that the blanket prohibition was arbitrary and disproportionate, as it treated well-maintained Bharat Stage IV (“BS-IV“) and Bharat Stage VI (“BS-VI“) vehicles in the same manner as older, higher-emitting pre-BS-IV vehicles solely on account of age. By an order dated 12 August 2025, the Supreme Court restrained coercive action against over-age vehicles pending further consideration. The Court subsequently modified this protection on 17 December 2025, permitting enforcement against pre-BS-IV vehicles while continuing to protect BS-IV and BS-VI vehicles from seizure solely on the basis of age. The orders signal a shift from a blanket age-based prohibition towards a technology- and emissions-based approach to regulating end-of-life vehicles.

Accordingly, Policy 2.0 governs the registration of new vehicles, whereas the EOL framework continues to determine whether older vehicles may remain in use. As the litigation evolves, the focus appears to be shifting from age alone towards a technology- and emissions-based approach.

CRITICISM AND IMPLEMENTATION CONCERNS

Despite its ambition, EV Policy 2.0 has drawn sustained criticism across multiple fronts, ranging from procedural objections to structural conflicts with existing regulatory regimes and infrastructural limitations. The following issues have emerged as the principal points of contention:

1. Consultation deficit: The Delhi Auto Rickshaw Sangh and the All-India Motor Transport Congress have described the January 2027 electric-only registration mandate for three-wheelers as abrupt and coercive, citing the lack of prior stakeholder consultation. They have also sought an enhanced subsidy of up to INR 1.5 lakh, given that a new electric auto-rickshaw costs approximately INR 3 lakh¹⁰.
2. Conflict with the permitted ceiling: Delhi’s passenger auto-rickshaw permits remain capped near 1 lakh. The officials from the Transport Department contend that fresh electric-auto registrations have been effectively frozen for over a year, independent of the new mandate, and are pressing the GNCTD to seek Supreme Court relaxation of this ceiling. This illustrates a structural tension between the EV mandate and the pre-existing permit regime it operates within¹¹.
3. Grid and DISCOM capacity constraints: A substantial gap persists between Delhi’s stated requirement of 36,177 charging points and the 8,998 currently operational, indicating that deployment is falling behind demand. This shortfall is compounded by a near-ninefold rise in charging load from 24 MW in FY19 to over 227 MW at present, projected to reach 375 MW within two years, raising the risk of grid congestion and voltage instability at the transformer level if network upgrades fail to keep pace. The intensifying competition among discoms to build out charging points may further incentivise expansion over profitable operation, translating into prolonged periods of low or negative return¹².
4. Disbursal lag and road safety: Buyers under the 2020 Policy reported multi-month delays in subsidy disbursal, which Policy 2.0 seeks to remedy through a direct-benefit-transfer portal promising payout within 60 (sixty) days¹³. Separately, e-rickshaw drivers have reported a Bluetooth-enabled battery-management application being used by third parties to remotely disable batteries mid-route, prompting a police probe, a road-safety concern adjacent to, though distinct from, the policy’s technology mandates¹⁴.

CONCLUSION

Policy 2.0 marks a meaningful shift from the 2020 Policy’s incentive-only design to a binding, phased registration mandate layered on continuing fiscal support, a structure that gives it materially more legal teeth, but also exposes it more to challenge on grounds of consultation, proportionality and readiness of supporting infrastructure.

The effectiveness of EV Policy 2.0 will depend not only on its regulatory framework but also on developments beyond the policy itself, including the Supreme Court’s decision on the criteria for EOL vehicles, timely grid augmentation by the DISCOMs and DTL, and relaxation of the three-wheeler permit cap. In the absence of coordinated action on these fronts, implementation may face practical constraints despite the policy’s mandatory provisions. Nevertheless, with effective co-ordination between the GNCTD and the DISCOMs, Policy 2.0 has the potential to serve as a regulatory model for other pollution-affected Indian cities as well.

1. “Identification of the causes for worsening AQI in Delhi-NCR” Report of the Air Quality Experts, Commission for Air Quality Management in National Capital Region and Adjoining Areas
2. Paragraph 4.2.2 of the Delhi EV Policy 2.0
3. Paragraph 4.3.1 of the Delhi EV Policy 2.0
4. Paragraph 4.7 of the Delhi EV Policy 2.0
5. Paragraph 4.6.3 of the Delhi EV Policy 2.0
6. Paragraph 12 of the Delhi EV Policy 2.0
7. Paragraph 5 of the Delhi EV Policy 2.0
8. Vardhaman Kaushik v. Union of India, OA. No. 21 of 2014 dated 26 November 2024.
9. M.C. Mehta v. Union of India (2019) 17 SCC 490
10. Delhi EV Policy Faces Auto Union Opposition, Daily Pioneer, 1 July 2026
11. Delhi’s auto rickshaws are going electric, Business Today, 2 July 2026
12. Delhi EV Charging Boom: Grid Strain, Discom Competition Raise Financial Doubts, Whalesbook, 15 April 2026.
13. Delhi News Live, Delhi Launches EV Subsidy Portal; Incentives to Be Credited Within 60 Days Through DBT, July 4, 2026
14. Delhi e-rickshaw drivers fear app-based battery shutdowns, The Patriot, 2 July 2026.