Delhi’s radical new electric mobility policy coincides with a well-known tipping point that India hit earlier this year, a threshold that could see the domestic electric vehicle market shift gears from early adopters to mass penetration.
The share of electric cars in India’s total passenger vehicle sales crossed 5% in June, show data from the Federation of Automobile Dealers Associations. That milestone signals a maturing EV market that Delhi could take advantage of as it aims to phase out non-EV vehicles within five years through mandates rather than merely nudging consumers with subsidies.
The new policy draws on lessons from countries where combining incentives with mandates has proved more effective than relying on a single approach.
The conditions in India appear increasingly favourable: automakers are rolling out dozens of new electric vehicle models, charging infrastructure is expanding, and adoption is gathering pace across vehicle categories.
But are these adequate for electric mobility mandates to succeed? Could Delhi’s gambit become the blueprint for the rest of India?
Sticks and carrots
Delhi’s new policy that came into effect on 1 July targets high-usage, high-impact vehicle categories: two wheelers, three wheelers, goods vehicles and school buses.
The deadline for shifting to electric is 1 January 2027 for autorickshaws and light goods vehicles, and 1 April 2028 for two-wheelers; new non-electric vehicles under these categories will not be registered after the notified dates. School bus operators are required to electrify 10% of their fleet within two years, and hit 30% by 2030.
But the state’s new EV policy is not all sticks. Generous incentives have been provided for the purchase of new EVs and scrapping of old non-electric vehicles. EV buyers have been exempted from road tax and registration fees.
These incentives are not unique: most Indian states offer purchase subsidies, along with road tax discounts or waivers. But Delhi is the first state to take the decisive step of phasing out non-EV vehicles within a relatively short time frame.
Crossing the 5% milestone
The state of electric mobility in India needs to be assessed on two broad parameters: charging stations and EV adoption.
Charging infrastructure is the backbone of an EV ecosystem. The Global EV Outlook 2026 report by the International Energy Agency (IEA) points out that availability and accessibility of public charging points is the key to widespread EV adoption.
Data from the ministry of power shows that India had 27,737 public charging stations in March 2026, a sharp jump from about 5,000 in March 2022.
However, the distribution of these stations is skewed. Maharashtra, Uttar Pradesh, Tamil Nadu, the Delhi-National Capital Region, and Karnataka account for the bulk of installations, with heavy clustering around metro cities. A report from the Observer Research Foundation has estimated that India will need 1.32 million public charging stations if it aims for a 30% EV share by 2030—a 48-fold increase from current levels.
Fortunately, since charging is a delicensed activity, the market is a vibrant mix of existing public sector heavyweights (the fuel stations of oil marketing companies), large private companies (Tata Power, Reliance Jio), and regional providers (Ather in south India).
But meeting quantity targets is not enough. There is an urgent need to address shortcomings in infrastructure quality such as non-functional charging stations, lack of inter-operability (across vehicle types, apps, payment systems), slow speed of charging, inadequate coverage outside major highways, and absence of charging networks in rural areas and smaller towns.
EV owners want to be able to find a fast, working charger when they want, where they want. This is not always possible because the demand for EVs is growing much faster than installation of charging infrastructure.
This is where the 5% milestone becomes crucial. Studies show that most countries take less than three years to go from 5% to 15% EV share. As more people embrace EVs, these vehicles become the mainstream choice. Manufacturers are encouraged to invest in supply lines, battery technology and charging infrastructure.
Simultaneously, state support kicks in to facilitate infrastructure investment. As it becomes easier to buy, own and run EVs, demand grows rapidly, setting up a virtuous cycle that results in competitive prices, a wider variety of models, and technological innovation.
Retail sales data suggests that such a cycle may not be too far for India. In June 2026, 7.8% of passenger cars, 10.6% of two-wheelers and 64.1% of three-wheelers sold were electric—a significant jump from 4.8%, 7.3% and 58.4%, respectively, in June 2025. Clearly, three-wheelers are far ahead, but other segments are also growing fast.
Timely mandate
Indeed, Delhi’s push for mandatory electric mobility comes at an opportune time, for three reasons. One, the US-Iran war has starkly highlighted India’s dependence on imported crude. Uncertainty about fuel availability and high petrol prices have made EVs more attractive.
Most electric car makers provide online calculators that allow prospective buyers to estimate the amount saved in switching to electric from petrol or diesel. For example, MG Motors estimates that EV owners save ₹3–6 lakh over a five-year period.
Two, regulatory norms favour non-fossil fuel cars. India is expected to enforce the third phase of Corporate Average Fuel Efficiency (CAFE3) norms from 1 April 2027. CAFE3 requires carmakers to tighten fuel efficiency and reduce carbon emissions, which will result in a pivot towards hybrids and EVs.
Third, the EV supply pipeline is large and growing. Every leading carmaker now offers EV options. Nearly 50 new EV models are expected to be launched in 2026-27 across two-wheelers and cars; the models offer choices in battery technology, price, design and driving range.
Global EV rides
Policy pressure could be a game changer at this crucial stage of EV adoption. The basic conditions are in place: demand is surging and supply is strong. But that’s not enough: the experience of other EV adopters shows that it is impossible to accelerate electric mobility without policy support.
Specifically, for emerging economies, regulatory nudges are more effective than appeals to adopt cleaner fuels. If it makes economic sense to own and run EVs, they will, and the resulting drop in pollution is seen as a welcome bonus.
To unpack the role of policy in enabling EV transitioning, it is useful to classify EV adopters into two categories. The first group includes countries with small populations and high incomes (Norway, Sweden, Netherlands), which relied largely on incentives that were offered for decades, allowing residents to shift gradually from petrol to hybrids to EVs over decades.
In Norway, EV purchasers enjoyed zero purchase or import tax, and value-added tax (VAT) exemption, and EV owners had zero road tax, toll charges, ferry charges, and free municipal parking. Iceland offered similar tax and usage incentives, and relied on its abundant geothermal/hydro power production to provide cheap electricity for charging EVs. Germany and the Netherlands offered purchase subsidies and tax benefits for corporate EV fleets.
This “carrot” route is already in place in India to some extent. The impact is visible, but not eyepopping.
The second group comprises emerging markets that transitioned to electric vehicles in a relatively short time despite scarce fiscal resources. The standout successes in this group are Nepal and Myanmar. Myanmar launched an EV pilot program in 2022, allowing EVs to be imported at zero customs duty.
A de facto ban on conventional vehicles powered by internal combustion engines (ICE) was imposed simply by not granting import licenses for new non-electric vehicles. The military regime effectively moved the country to EVs via a policy diktat. Because Myanmar does not have a local automaking industry, it depends on imports from China.
Ethiopia adopted a similar strategy, banning ICE vehicle imports outright in 2024. It followed this up by raising petrol prices, reducing customs duties on EVs, and offering tax deductions for locally assembled EVs. Within two years, the share of EVs on the road went up from 1% to 6%.
Like Myanmar, Ethiopia depends heavily on low-cost Chinese EVs. In fact, Chinese firms are deeply entrenched in its EV ecosystem, being involved in financing, supply of parts and setting up local assembly plants.
Nepal’s path to EV adoption was less draconian. Blessed with abundant hydropower and unable to afford crude imports, the government decided to use taxation to modify buyer behaviour. In a landmark decision in 2020, import taxes on selected EV categories were slashed, while that on ICE vehicles were kept high, thus making electric vehicles more affordable.
Other incentives such as excise and registration fee concessions, better bank financing options, and preference in government vehicle procurement also helped to spur demand for EVs. An added advantage is that the torque and braking characteristics of EVs turned out to be better suited to Nepal’s mountainous terrain than traditional vehicles.
Singapore mandates all new car and taxi registrations from 1 January 2030 must be non-fossil fuel (electric, hybrid or hydrogen). It is promoting EVs by offering time-bound tax rebates and incentives, along with limited financial support to install chargers.
- 1.32 million | The number of public charging stations India needs for a 30% EV share by 2030, up from about 28,000 in March 2026.
- 7.8% | Share of electric vehicles among all passenger cars sold in India in June 2026, up from 4.8% in June 2025.
- 2030 | The year by when Delhi wants most new vehicle registrations in key categories to be electric.
Other southeast Asian nations are using incentives to build a local EV industry.
Indonesia levies discounted VAT rates on EVs produced in facilities with 40% local content, enabling carmakers with strong local operations to sell at a lower price. In addition, it has recently announced zero import duties on manufacturers committing to set up domestic operations within a prescribed time frame.
This strategy—described as “try before buy”— aims to attract foreign direct investment by de-risking their initial years; China’s BYD is a key participant in this scheme.
Thailand has a somewhat similar strategy. Companies are allowed to import EVs at concessional rates and avail of purchase subsidies provided they compensate by producing locally such that the ratio of imported units to domestic production is 1:3 by 2027.
Incentives and mandates
The rise of a local EV company can accelerate electric adoption. Two notable instances are Vietnam and Turkey. In Vietnam, strong government backing helped a local company, VinFast, to rapidly become the undisputed market leader.
V-Green, a group company, has rolled out nationwide charging ports exclusive to VinFast EVs, thus making it harder for foreign competitors to gain a foothold in the market. VinFast is now more than a national champion—it has market presence in several countries, including India.
In Turkey, Togg, a collaboration between five Turkish companies, launched its first model in 2023, and quickly became the market leader. Togg has benefited from a sentiment of national pride as well as additional tax advantages granted to locally made or assembled vehicles; it helps that its cars are of high quality.
Turkey has become a dynamic EV market, with local startups across the EV ecosystem. It is now positioning itself as the regional EV hub and gateway to Europe.
The experience of emerging markets has some valuable lessons for India. First, combining incentives with mandates has proven to be more effective in boosting EV adoption as compared to relying on only one approach.
Second, policies to support and promote local production must be pursued, without blocking out foreign EV makers. For instance, in Turkey, national brand Togg has around a fifth of the EV market share, but Tesla and BYD are also major players.
Third, the EV push should not be restricted to private cars and two-wheelers; large public transport vehicles like buses and trucks also need to be converted. China began its EV journey by converting city buses to EVs; this became a visible symbol of EV success that could be replicated by other vehicles. Hanoi, in Vietnam, has set a target of having an all-electric city bus fleet by 2030 to improve urban air quality.
In this context, Delhi’s phasing out of non-electric school buses is a good step forward. Finally, neither carrots nor sticks will work if support infrastructure is weak: hence policies that incentivize the setting up of charging infrastructure are essential.
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