No tax breaks on EVs above Rs 30 lakh: 2026 Delhi EV policy proposal

The Delhi government’s 2026 EV policy draft has proposed limiting the exemption from road tax and registration fees to electric cars priced up to Rs 30 lakh (ex-showroom) until March 31, 2030. All EVs have been exempt from these charges since 2020, but this price cap, if implemented, will narrow the benefit to a limited number of models. The draft also suggests a 50 percent exemption from both charges for strong hybrid vehicles priced up to Rs 30 lakh during the same timeframe.

1. If implemented, on-road prices of high-end luxury EVs may rise
2. 50 percent road tax, registration fees waiver proposed for hybrid cars priced up to Rs 30 lakh
3. Rs 1 lakh incentive on scrapping Delhi-registered BS-IV and below cars suggested too

Which cars could be affected?

If the proposed price cap is implemented, on-road Delhi prices of high-end electric vehicles such as the BYD Seal (Rs 43.34 lakh-56.30 lakh), BMW iX1 LWB (Rs 54.46 lakh), Tesla Model Y (Rs 63.11 lakh-71.71 lakh), MG Cyberster (Rs 79.21 lakh), Porsche Macan EV (Rs 1.28 crore-1.82 crore), BMW i7 (Rs 2.13 crore-2.96 crore), Mercedes EQS SUV (Rs 1.41 crore-1.56 crore) and Rolls-Royce Spectre (Rs 8.04 crore-10.02 crore) could increase.

Cars offering a hybrid powertrain under Rs 30 lakh (ex-showroom) are limited to the Maruti Grand Vitara and Victoris, Honda City e:HEV, Toyota Hyryder, Maruti Invicto and Toyota Innova Hycross. The Duster hybrid, which will launch in Diwali, is expected to be positioned under Rs 25 lakh.

Rs 1 lakh scrappage benefit to limited applicants

Additionally, the policy proposes a Rs 1 lakh scrapping incentive upon purchase of a new electric car (whose price should not exceed Rs 30 lakh), given its purchase is made within six months of issuance of the Certificate of Deposit (CoD) from an authorised scrapping facility. Notably, the draft states that this should be done for the scrapping of Delhi-registered BS-IV and below cars, limited to the first 1,00,000 eligible applicants. 

“All scrapping incentive shall be disbursed through direct benefit transfer to individuals. All scrapping incentive on CoD shall be applicable only to the owner of the scrapped vehicle. Eligible beneficiaries shall apply directly for subsidy claims through a mechanism notified by the Transport Department, Government of National Capital Territory of Delhi,” the draft noted.

FY2026 hybrid and EV sales

In the recently concluded financial year 2026, the share of hybrids in vehicle sales was 8.21 percent, slightly down from 8.73 percent in the year-ago period, while EVs’ share rose from 2.61 percent to 4.25 percent. Although the benefits proposed for hybrids are lower than those for EVs, they could still help boost hybrid adoption if rolled out, especially given the challenges around EV infrastructure and high charging times. Hybrids, being more fuel-efficient and cleaner than pure ICE cars, can serve as a practical middle ground, effectively bridging the gap until EV infrastructure improves and charging times become more convenient.