Electric vehicles become 10% costlier in Delhi, registrations slip

Electric vehicles are piling up in showrooms, as buyers hesitate to pay the steep increase in prices, leading to a sharp decline in registrations in an already challenging market, dealers and industry executives said.

Dealers of leading electric two-wheeler manufacturers, including Ather Energy, Bajaj Auto, and TVS Motor Company, as well as leading electric passenger vehicle makers Tata Motors, MG Motor India and BYD, said that since 30 August, the Delhi government has been charging a road tax of 7%-8% in the case of electric two-wheelers and 10% for four-wheelers. Buyers enjoyed a full road-tax waiver under the now-expired EV policy.

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EV registration slowdown

Data from the government's Vahan portal reveals a marked slowdown in EV registrations in the first days of September, with not a single electric passenger vehicle registered in Delhi and only 19 electric scooters registered so far this month. While Vahan registration data often lag actual sales, partly reflective of the dip, dealers confirmed that in the past 3-4 days, almost no registrations have taken place due to the sudden increase in prices.

Prices for electric four-wheelers have also been adjusted to reflect the new 10% road tax charge, further exacerbating the situation. “We are negotiating with the customer by absorbing some of the amount ourselves and by passing on the rest to the customer, or in some cases absorbing it entirely. But there is no indication right now that this amount might be returned to OEMs (original equipment manufacturers) or customers", a New Delhi-based e-two-wheeler dealer told Mint on condition of anonymity.

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Dealers seek relief

Dealers and OEM representatives are scheduled to meet Delhi transport minister Kailash Gahlot on 9 September to seek relief. The stakeholders are expected to request that the subsidies be reinstated or extended to prevent further disruption in the EV market and to maintain the momentum of EV adoption in the capital.

The disruption in the city's EV market comes in the backdrop of a delay in the announcement of the EV Policy 2.0, which is said to be in the works. 

Queries emailed to the Delhi Transport Department remained unanswered till press time. 

This unexpected move has resulted in an additional cost of around 10% of the vehicle's price, significantly burdening potential EV buyers. Adding to the challenge, neighbouring states like Uttar Pradesh continue to offer attractive cash subsidies of up to ₹1 lakh on electric cars, making Delhi's increased costs even more daunting for those considering an EV purchase. When dealers approached the Regional Transport Office (RTO) for clarification, officials indicated that in the absence of a notification for the EV Policy 2.0, all EVs will be subjected to the same road tax as non-EVs," A FADA representative told Mint.

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“The expiration of the Delhi EV policy comes at a critical time for the market, which has already seen a significant decline in fleet sales year-over-year following the conclusion of the FAME 2.0 scheme. The introduction of road tax charges in Delhi is expected to further stress EV sales, particularly with the festive season approaching and several new EV launches on the horizon, including the Tata Curvv EV, MG Windsor EV, and upcoming offerings from Maruti and Hyundai set for early 2025," a passenger EV dealer said on condition of anonymity.

"This sudden policy shift could stall the momentum built by the previous EV initiatives," the FADA representative told Mint.