Delhi’s EV Policy 2.0: How the Capital Is Betting on Mandatory Electrification to Break Its Pollution Cycle

From Incentive to Mandate

In 2020, Delhi’s then-government introduced its first structured electric vehicle policy, a framework built almost entirely on persuasion. Subsidies, purchase incentives, and awareness campaigns were meant to nudge consumers toward electric mobility. The approach was cautious, and by design, entirely voluntary. It set the city’s transition in motion, but it did not accelerate it.

By 2025, the limits of that model had become difficult to ignore. Electric two-wheelers accounted for just 7.5 percent of annual two-wheeler registrations in Delhi — 36,962 units out of 492,288 sold. For a city that consistently ranks among the most polluted in the world, voluntary adoption was moving too slowly against a vehicle stock in which two-wheelers alone constitute roughly 67 percent of all registered vehicles.

The transport sector contributes approximately 23 percent of Delhi’s PM2.5 pollution during winter months, making it the single largest pollution source within the city. Two-wheelers, by sheer numerical weight, sit at the centre of that problem. Something more structural was needed.

The Architecture of EV Policy 2.0

On July 1, Chief Minister Rekha Gupta announced the Delhi EV Policy-2026, formally designated as EV Policy 2.0. The announcement marked a deliberate departure from the incentive-only architecture of its predecessor. Where the 2020 policy sought to attract, the 2026 policy mandates: all new two-wheelers registered in Delhi must be electric from April 2028, and L-5 auto-rickshaws must follow from January 2027.

The shift from voluntary to compulsory electrification is not merely rhetorical. It represents a recalibration of the state’s role — from market facilitator to regulatory actor — and places Delhi among a small number of urban administrations globally willing to use hard deadlines rather than price signals alone to drive modal transition.

The policy retains purchase incentives of up to Rs 30,000 for electric two-wheelers and raises the ceiling for three-wheelers from Rs 30,000 to Rs 50,000. For the first time, it introduces a scrappage incentive: Rs 10,000 for retiring an old two-wheeler, and Rs 25,000 for a three-wheeler. Electric trucks become eligible for incentives of up to Rs 1 lakh, with additional scrapping benefits layered on top.

Infrastructure, Finance, and Institutional Reform

Beyond the vehicle-level incentives, the policy outlines an institutional framework designed to address the coordination failures that have historically slowed EV adoption. A single-window clearance system is being introduced to reduce bureaucratic friction for charging infrastructure deployment. The government has set a target of more than 30,000 public charging points across the city — a figure that reflects the scale of infrastructure build-out required to make mandatory electrification operationally viable.

The financial underpinning of the policy has also been broadened. The earlier EV Fund drew primarily from pollution cess, road tax, and related charges. The 2026 policy expands that base to include the central government’s PM E-DRIVE scheme, broader central and state budgetary allocations, and the ECC Fund — diversifying the revenue streams available for implementation and reducing dependence on any single source.

School bus electrification enters the policy framework for the first time, with a target of 30 percent electric by 2030. The policy also makes a notable omission: proposed incentives for strong hybrid vehicles were dropped from the final version, with support restricted exclusively to pure battery electric vehicles.

The Scale of What Remains Undone

The ambition embedded in the April 2028 deadline is considerable. Moving from 7.5 percent to 100 percent electric share in new two-wheeler registrations within less than three years demands simultaneous progress on several interdependent fronts, none of which is straightforward.

Each of these challenges is tractable in isolation. The difficulty lies in managing them concurrently, within a compressed timeline, in a city of Delhi’s density and complexity.

Implications Beyond the Capital

Delhi’s policy choices carry weight beyond its administrative boundaries. As the capital and the most visible node of the National Capital Region, its regulatory posture tends to set reference points for neighbouring states. Officials and analysts expect the EV Policy-2026 to exert pressure on other NCR states to consider comparable electrification mandates, particularly as the region’s shared airshed makes unilateral action by Delhi only partially effective.

Chief Minister Gupta framed the policy not as a vehicle-count exercise but as the foundation for a broader transformation of Delhi’s transport system — a distinction that signals intent to follow the mandate with the institutional follow-through it requires. Whether the infrastructure, the supply chain, and the financial architecture can be assembled at the pace the deadline demands will determine whether EV Policy 2.0 becomes a model for urban electrification in South Asia, or a cautionary study in the gap between regulatory ambition and implementation capacity.