Delhi govt unveils electric vehicle policy, proposes subsidy on buying and e-vehicles

The policy also has a provision to impose a pollution cess on petrol vehicles in the near future.

The Delhi cabinet, chaired by chief minister Arvind Kejriwal, on Monday approved the Delhi Electric Vehicle (EV) Policy, 2019, with an aim to reduce air pollution by offering subsidies and waiving road tax and registration fee for electric vehicles bought in the national capital.

The EV policy, however, is yet to be notified and the schemes under it will be valid for a period of three years from the date of its notification. Those buying an electric vehicle will be exempt from road tax and registration fee. (REUTERS)

The policy also has a provision to impose a pollution cess on petrol vehicles in the near future. It has also proposed increasing road tax for luxury vehicles in the city after a few years, said Jasmine Shah, vice-chairperson of the Dialogue and Development Commission of Delhi (DDCD) which drafted the document.

Currently, a cess of Rs 25 paise per litre is imposed on every diesel vehicle in Delhi which goes towards the Air Ambience Fund (AAF) using which the air quality monitoring stations are operated. On implementation of the policy, 50% of this cess will be used to create ‘State EV Fund’, while 50% will go to the AAF.

The EV policy, however, is yet to be notified and the schemes under it will be valid for a period of three years from the date of its notification. Those buying an electric vehicle will be exempt from road tax and registration fee. At present, road tax ranges from 4% to 10% of the cost of the vehicle whereas registration fee could cost up to Rs 3,000.

The government aims to register at least five lakh EVs in Delhi in the next five years. Delhi has 83,730 electric vehicles out of a total of over 11 million vehicles registered in the city. Of the 83,730 registered EVs, a mammoth 75,567 are e-rickshaws. There are only 908 private electric cars and 3,703 e-two-wheelers in Delhi.

Kejriwal, while making the announcement in a press conference on Monday, said the policy, once implemented, will make Delhi the ‘EV Capital of India’. “Along with reducing pollution levels in the city, the policy also aims to generate employment in the transport sector. Maximum emphasis is laid on two-wheelers, public transport and shared vehicles, and goods-carriers,” he said.

A subsidy of Rs. 5,000 per kWh of the battery capacity will be given on the purchase of two-wheelers and Rs 10,000 per kWh for the first 1,000 e-cars subject to a cap of Rs.1,50,000 per vehicle.

To push people to shift to EVs and scrap their fuel-based vehicles, the policy also has a scrapping incentive.

“The Delhi government will give up to Rs 5,000 to two-wheelers, Rs 10,000 to cars and Rs 7,500 to auto-rickshaws (petrol, diesel or CNG) for getting them scrapped. This will be in addition to what the manufacturers offer. This means if a two-wheeler manufacturer is offering Rs 5,000 for an old motorcycle, the Delhi government will an equal amount. The same rule will apply to every category of vehicles,” said Shah.

Experts said the Delhi government’s decision to prioritise two-wheelers, commercial and freight vehicles over private cars in its EV policy is the right move. Sanjay Gupta, head of transport planning department at the School of Planning and Architecture, “Given that more than 70% (over 7.3 million of over 11 million) of Delhi’s registered vehicles are two-wheelers, the EV policy is well placed and is likely to be easier to be complied with. Electric cars are still very expensive compared to e-two-wheelers which can be bought in Delhi even in Rs 70,000 or less.”

However, the government should also focus on creating enough charging spaces within the city and beyond, he said. “It should collaborate with neighbouring cities to have enough infrastructure as working in silos won’t help. Many in Delhi take their vehicles out to Gurugram or Noida for work. They need to have charging infrastructure in such cities too,” Gupta said.

In a year since the policy’s notification, all leased or hired cars used by the Delhi government will shift to electric vehicles, Kejriwal said.

The chief minister termed the policy a significant step towards ensuring cleaner air in the city. “Vehicles are the biggest source of pollution in the capital and amount to 40% of PM2.5 air pollution levels and 80% of carbon monoxide in the air. Over their lifetime, these EVs are estimated to save approximately Rs 6,000 crores worth of oil and liquid natural gas consumption,” he said.