Government of Delhi NCR Bring E-Cycle Under Its Electric Vehicle Policy

Yesterday 7 April, 2022 the Delhi Government added e-cycles under the Electric Vehicles (EV) policy in the national capital. The first 1,000 buyers of passenger e-cycles will also be given an additional subsidy of Rs 2,000 under Delhi's EV policy.

This is a major push to promote electric vehicles; the government also announced a subsidy up to Rs 15,000. This will include both passenger and cargo e-cycles with a speed of less than 25 km/hour. Over and above this the first 10,000 buyers will get 25 per cent of the purchase incentive on buying the e-cycle.

Delhi Transport Minister, Kailash Gahlot said, “An additional incentive of Rs 2,000 for the first 1,000 individual e-cycle owners will be provided with an eye to creating the much-needed demand for e-cycles. The government will also provide a purchase incentive of 33 percent of MRP, up to Rs 15,000 per vehicle to the first 5,000 e-cargo cycle buyers to support the food delivery and e-commerce drivers in the city.”

Customers of e-cycle and cargo e-cycle will also be eligible for a scrapping incentive of up to Rs 3,000 per vehicle for scrapping and deregistering old ICE two-wheelers registered in Delhi. Till now, the Delhi government has given a total of Rs 59.44 crore subsidies for the purchase of EVs in the national capital.

The Delhi government had an initial target of EV registration of 25 per cent of the total vehicle registration by 2024. About a couple of years back,  the registration rate for EVs was 1-2 per cent, which has now become 12.6 per cent as recorded in the month of March, the Union Territory of Delhi has seen a massive increase.

Termed as one of the most progressive EV policies, the Delhi EV Policy could turn out to be the most progressive one in India and among the best globally. It was well-received because it sets an ambitious vision for Delhi to drastically reduce vehicular air to become one of the world’s top cities in terms of EV adoption. This ambitious government aims to have 1 out of every 4 vehicles sold in Delhi by 2024, to be an EV.  

Delhi EV Policy aims to achieve the overarching objective to improve Delhi’s air quality and create an entire supply-chain ecosystem for this new segment of vehicles. In order to significantly benefit Delhi’s air quality, the policy intends to deploy 25% of all new vehicles to be battery-operated vehicles by 2024.

The policy aims to ensure demand generation as a means to ensure mass adoption and quick proliferation. In order to ensure demand generation, it adopted a method of a combination of fiscal and non-fiscal incentives. While the fiscal incentive structure comprises purchase incentive, scrapping incentive on de-registration of old vehicles and interest waivers, the non-fiscal incentives will address issues such as road-tax waivers, green-registration plates for EVs, license-fee waivers and single-window clearances.

The demand incentive available on various segments is expected to have a positive impact on the overall return of investment of the vehicle.

The policy has the provision to support operations from a battery-swapping operator. While a number of theoretical and operational challenges exist around battery swapping systems, the policy may be a step in the direction of ensuring practical and commercial use of battery swapping technologies.

The funding angle to the Delhi EV Policy is also a rare one. It has adopted the concept of “feebate” that means adopting measures by which inefficient or polluting vehicles incur a surcharge to fund a high proportion of the demand incentives. The policy directs funding through sources like pollution cess, road tax, congestion tax, and other sources such as the environment compensation charge (ECC).