Delhi govt stops subsidy for electric cars, to focus on two-wheelers

Updated on Nov 03, 2021 01:23 AM IST

According to the Delhi EV Policy 2020, the government had mandated subsidies for only 1,000 e-cars, on a first come, first served basis. Government records, seen by HT, showed that the administration has not extended the benefit to any new e-car registered thereafter

Representational photo of electric vehicles charging
Representational photo of electric vehicles charging
By, New Delhi

The Delhi government has stopped the subsidy on electric cars in the national capital and has no plans to extend the scheme any further, transport minister Kailash Gahlot said on Tuesday.

Speaking to Hindustan Times, the minister said, “The electric cars segment has received the required push in Delhi. Our focus now is to tap the two-wheeler, freight and public transport segments of electric vehicles (EVs) as they constitute a major chunk of Delhi’s over 10 million registered vehicles. They also ply on the road more as compared to private cars, thereby causing more pollution.”

Of the 10 million registered vehicles in Delhi, about 7.3 million are two-wheelers. On October 28, HT had reported that the Delhi government plans to only procure electric buses in the future, with an aim to increase the share of zero-emission vehicles in public transport to over 50%. According to the plan, the government will induct at least 2,300 e-buses into its fleet by the end of 2022, and upgrade all existing bus depots with EV charging infrastructure.

According to the Delhi EV Policy 2020, which was notified by the Aam Aadmi Party (AAP)-led government on August 7 last year, the government had mandated subsidies for only 1,000 e-cars, on a first come, first served basis. Government records, seen by HT, showed that the administration has completed disbursing the subsidy to the first 1,000 e-cars and has not extended the benefit to any new e-car registered thereafter.

The first 1,000 e-cars also got waivers on road tax and registration fee, in addition to a subsidy of 10,000 per kWh of battery capacity, with benefits being capped at 1.5 lakh per vehicle. For electric two-wheelers, auto-rickshaws, rickshaws and freight vehicles, the subsidy is 5,000 per kWh of battery capacity, with a cap of 30,000 per vehicle. These segments, unlike the e-cars, have no cap on the number of vehicles that can avail of the benefits, which are also being offered on a first come, first served basis.

Delhi government data further showed that between August 7, 2020, and October 27, 2021, a total of 22,805 EVs were registered in the city. The total number of incentives paid out by the Delhi government so far stood at 9,633 and the total funds utilised for the purpose amounted to 34.31 crore.

Of the 22,805 EVs registered during the above-mentioned period, 10,997 (48.2%) were e-rickshaws, followed by 5,246 electric two-wheelers (23%) and 3,845 e-carts (16.8%). Only 1,415 were e-cars and 309 were e-cabs. Overall, a total of 121,903 EVs have been registered in the city.

Transport officials said there is lesser demand for electric cars/four-wheelers as compared to other EV segments owing to a lack of options in the auto market. “There are very few e-car variants that have an affordable price tag. Things may look up from next year, as auto manufacturers Tata and Hyundai are planning to introduce electric hatchback variants,” said a senior transport official, on condition of anonymity.

“Actually, a subsidy is not required for e-cars as such because those who can afford to pay around 15 lakh for a vehicle do not care if the cost is 1-2 lakh more, sans the subsidy. Our aim is to provide the subsidy to those who need it the most, and they include auto drivers, two-wheeler owners, delivery partners and so on,” said Gahlot.

With the Delhi government stopping its subsidy for e-cars, there will be zero subsidies in this segment as even the Centre’s FAME-II scheme cover only electric two-wheelers, three-wheelers, four-wheeled passenger vehicles and goods carrying vehicles. It does not yet offer subsidies for electric cars meant for personal use.

With fuel prices touching an all-time high across the country, there has been an increased interest in electric vehicles for personal use.

At present, very few variants of e-cars are available in the market and most of them are above 15 lakh. Tata Nexon EV ranges from 13.99 lakh to 16.85 lakh, Mahindra E-Verito costs between 12.67-13.03 lakh, Hyundai Kona electric ranges from 23.71-23.91 lakh, MG ZS EV is between 20.99-24.68 lakh and Mercedes Benz EQC costs around 1.06 crore.

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  • ABOUT THE AUTHOR

    Sweta Goswami writes on politics, urban development, transportation, energy and social welfare. Based in Delhi, she tracks government policies and suggests corrections based on public feedback and on-ground implementation through her reports. She has also covered the Aam Aadmi Party (AAP) since its inception.

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