Potential Risks of Delhis EV Policy If Adopted by Other States

Delhis newly announced Electric Vehicle (EV) Policy for 2026 seeks to promote sustainable transportation by phasing out petrol and compressed natural gas (CNG) two-wheelers by April 2028, while also mandating the transition to electric three-wheelers starting in 2027. This strategic initiative is designed to enhance clean mobility in the capital and contribute to reducing air pollution.

To support this transition, the Delhi government has allocated Rs 70 billion (approximately $845 million) in direct incentives aimed at encouraging the adoption of electric vehicles. The policy also emphasizes the importance of infrastructure development, with plans to install over 30,000 charging points across the city to facilitate the widespread use of EVs.

However, a report from Morgan Stanley cautions that while these efforts present significant opportunities for growth in the EV sector, there may be challenges ahead. It notes that if other Indian states adopt similar policies, it could create competitive pressures for automakers, particularly in the two-wheeler segment, which is a critical market in India. As of now, the Delhi government aims to position the city as a leader in the transition to electric mobility, aligning with national goals to reduce carbon emissions and combat climate change.