No incentive, won’t buy. That appears to be the message coming through from dismayed consumers in Delhi after the state government failed to renew road tax and registration benefits on electric cars and two wheelers this September.
Result: an unprecedented fall in sales of the eco-friendly vehicles from September to November, even as pollution levels have hit record levels in the capital in recent days.
Data from the government’s Vahan dashboard showed that registration of electric four-wheelers in Delhi fell 79% to just 77 units in September compared to 312 EVs in August. October saw sales of 148 units of electric cars, which then crashed to just 56 units in November thus far.
Significantly, the national capital is one of the three largest markets for electric cars in India and the largest for electric taxis.
The decline is especially pronounced in the case of electric cabs, sops for which were taken away from the PM e-DRIVE scheme, which used to offer subsidies on the purchase of electric cars for commercial use. PM e-DRIVE came into effect on 1 October, replacing the FAME-II policy.
The double whammy arising from a lack of both state and central government support has led to fleet buyers pausing sales in Delhi, which has 8,000 registered electric cabs.
As pollution levels hit 40-year peak levels in Delhi, the capital has lost its early advantage as a top EV market thanks to a forward-looking EV policy formulated in 2019. Data shows neighbouring cities like Noida and Ghaziabad in Uttar Pradesh and Gurugram and Faridabad in Haryana have overtaken Delhi, as buyers hunt for more favourable sops from state governments.
Starting September, EVs in Delhi are 10% more expensive, while they are now close to 15% cheaper in Delhi and Haryana.
Ajay Agarwal, chairperson of Federation of Dealers’ Association of India (FADA)-Delhi, and owner of TREO Tata, told Mint that the withdrawal of incentives such as registration fee waivers for personal EVs and FAME subsidies for electric cabs has halted progress in the past two months, even as neighbouring states continue to see growth in EV adoption.
“Delhi’s 2020 EV policy had built strong momentum, but the current vacuum risks undoing these gains,” Agarwal said. “Policymakers must urgently notify a revised policy and reinstate incentives to drive EV adoption and combat Delhi’s severe pollution crisis.”
The renewal of Delhi’s EV policy is in limbo as the state government awaits stability of policy under a new chief minister.
Data from FADA Research highlights a contrasting trend in EV retail sales between Delhi and its neighbouring regions.
In Delhi, electric two-wheeler (2W) sales saw a marginal decline of 0.8% y-o-y from April to October 2024, with 18,185 units sold compared to 18,327 in the same period in 2023. The electric passenger vehicle (PV) segment in Delhi experienced a sharper decline of 36.1%, dropping from 4,520 units in April-October 2023 to 2,887 units in the corresponding period in 2024.
In contrast, the neighbouring regions of Gurugram and Faridabad as well as Noida and Ghaziabad recorded remarkable growth in EV sales during the same period.
Two-wheeler EV sales in Gurugram and Faridabad grew by 118.57% y-o-y, while Noida and Gaziabad witnessed an even higher growth of 124.31% y-o-y.
Similarly, electric passenger vehicle sales in Gurugram and Faridabad increased by 85.46%, and Noida and Gaziabad saw growth of 20.68%.
These numbers suggest that these areas are becoming hotspots for EV adoption due to better incentives and infrastructure, highlighting that EV consumers are still price-sensitive, and subsidies are crucial drivers of demand in the market.
