Delhi Electric Vehicle Policy 2020 - A Review

As India is focusing on promoting the EV ecosystem to improve urban air quality and reduce crude oil imports, on 7^th August 2020, the Government of Delhi notified the Electric Vehicle policy. The policy was previously approved by the Council of Ministers, GNCTD on 23^rd December 2019 and now is notified for the next three years.

The goal of the policy is to establish Delhi as the EV capital of India and accelerate the pace of EV adoption across all vehicular segments with a focus on 2-wheelers, public/shared transport vehicles, and goods carriers. The policy aims to achieve 25% of all new vehicle registrations to be BEV (Battery Electric Vehicle) by 2024.

To achieve this ambitious target, the government has focused on providing demand incentives to all categories of vehicles. The following table list the purchase and scrapping incentives that have been allocated for the different vehicular segments. The incentives are based on various eligibility criteria mentioned in the policy document.

Apart from the fiscal benefits, the policy also states exemption of road tax and registration cost of all EVs for the next three years.

Charging Infrastructure

In addition to the vehicular incentives, the policy also promotes the setting up of charging infrastructure for both home charging and public charging stations. The policy states that building bye-laws shall be changed for all new home and workplace parking with 20% of all vehicle holding capacity/parking required to be Electric Vehicle ready.

The government shall provide a grant of 100% for the purchase of charging equipment up to Rs. 6000/- per charging point for the first 30,000 charging points. For Public Charging Stations, the government emphasizes providing accessible public charging facilities within 3 km of travel from anywhere in Delhi. Energy Operators’ (EOs) shall be invited to set up charging and battery swapping stations across Delhi and will be provided with a capital subsidy for the cost of chargers installation expenses.

Battery Recycling

The Policy shall encourage the reuse of EV batteries that have reached the end of their life and setting up of recycling businesses in collaboration with battery Page 11 of 13 and EV manufacturers that focus on ‘urban mining’ of rare materials within the battery for re-use by battery manufacturers.

Funding Strategy

The policy states three sources to obtain fund for various incentives being offered in the policy. Pollution cess is already applicable on sale of diesel (25 paise/litre) in the NCT of Delhi, collection from which accrues to the Air Ambience Fund. 50% of the amount collected in Air Ambience Fund shall be transferred to State EV Fund monthly.

Additional road tax shall be levied on diesel and petrol vehicles, especially luxury cars. The additional tax shall be based on a sliding scale with high price diesel vehicles paying the highest additional road tax and low-price two-wheelers incurring a small addition. An appropriate Congestion Fee shall be levied on all trips originating or terminating within the NCT of Delhi and taken using cab aggregator and ride-hailing services. Any gap left after funding will be filled through allocations from the Environment Compensation Charge (ECC) already being collected in Delhi.

The Hits and Misses of the Policy

Delhi’s EV policy is a comprehensive policy that focuses on the objective of promoting EV adoption in NCT. The policy is aimed to boost the economy, improve the job market and reduce urban air pollution. Manufacturing stalwarts have also hailed the policy and called it a great move towards green transport. While the policy certainly is progressive in building an EV ecosystem, it does no addresses one of the key issues of Delhi’s urban mobility, i.e. congestion. Large scale adoption of passenger electric vehicles and limitless permits to E-autos can impact the ridership of public transport and increase congestion on the roads of Delhi.

In addition to that, the policy has a limited focus on research and development related activities along with no strategy for awareness campaigns that are essential to address the concerns of people related to EVs. In a nutshell, the policy has been able to address all the key aspects related to the EV Ecosystem and can certainly pave the way for EV adoption in the national capital of India.