Delhi offers $1,000 incentive to scrap old cars and switch to EVs

India’s capital New Delhi will offer a cash incentive of more than $1,000 to residents who scrap older vehicles and switch to electric cars under a new policy finalised by the government on Monday, as authorities seek to reduce severe air pollution levels.

New Delhi is among the world’s most polluted cities, with air quality deteriorating during winter months when dense, stagnant air traps emissions from crop burning in neighbouring states, vehicle exhaust and construction dust.

The local government has finalised a new electric vehicle policy with an outlay of 150 billion rupees ($1.59 billion) over four years to encourage purchases of electric two-wheelers, cars and small trucks, while also expanding charging infrastructure across the city.

Under the policy, residents who trade in cars purchased before April 1, 2020, for an electric vehicle will receive a scrapping incentive of $1,060.

Buyers of battery electric vehicles priced at up to 3 million rupees will be exempt from road tax and registration fees, which typically account for 4 per cent to 10 per cent of a vehicle’s price.

People purchasing electric scooters and motorbikes will receive a cash incentive of 30,000 rupees during the first year of the policy. The amount will fall to 10,000 rupees by the third year.

The Delhi government will register only electric two-wheelers from April 1, 2028, requiring buyers to shift away from gasoline-powered and other powertrain options.

The policy also includes incentives to support the installation of 32,000 EV charging points across Delhi.

Hybrid vehicles have not been included in the policy, which is expected to come into effect from July 1.

The measures are expected to provide a boost to electric vehicle manufacturers including Tata Motors and Mahindra & Mahindra, as well as electric two-wheeler makers TVS Motor, Bajaj Auto and Ather Energy.