Delhi EV Policy Expiration Leads to Higher Prices and Declining Sales

The cost of electric vehicles (EVs) in Delhi has increased, surpassing prices in many other parts of the country. This hike follows the Delhi government’s decision to remove the road tax waiver on EVs, which had been introduced to benefit customers and boost sales. Previously, under the Delhi EV Policy, this waiver helped reduce the cost of electric vehicles by around 10% for both four-wheelers and two-wheelers in the passenger EV segment. However, with the expiration of the policy on August 31, EV prices have surged, negatively impacting sales in the national capital.

Impact on Sales and Dealerships

According to a report by Mint, EV dealerships in Delhi are experiencing an increase in unsold inventory due to the removal of tax benefits. The Economic Times also reported that EV sales have dropped significantly since the policy’s expiration, citing sources from the Federation of Automobile Dealers Association (FADA). The withdrawal of the policy means that customers must now pay a 10% road tax on EVs, which was previously waived.

Delhi EV Policy 2.0: What’s Next?

The original Delhi EV Policy was launched on August 7, 2020, for a period of three years, and was extended twice after its initial expiration on December 31, 2022. The state government is currently working on a new Electric Vehicle Policy, referred to as EV Policy 2.0, but the timeline for its release remains unclear. The final draft of the policy is still being prepared for notification, and no definite launch date has been provided.

Stakeholders, including FADA, are planning to meet with state government officials to address the situation. Reports indicate that EV sales have dropped significantly since the beginning of September. A source stated, “The state government was expected to extend the road tax waiver, but this did not happen, even though the cap on the number of vehicles eligible for the benefit has not been reached. If the issue is not resolved soon, the progress made so far could be undone.”

Delhi's Position in the EV Market

Despite the recent decline in sales, Delhi remains a key player in the Indian electric vehicle market. In 2023, Delhi ranked second in terms of EV sales among Indian cities, with 8,211 registrations, trailing behind Bengaluru, which had 8,690 sales. However, between January and May 2024, Delhi has only recorded 4,016 EV sales, reflecting the overall downturn in the sector.