Delhi, One Of World’s Most Polluted Cities, Offers Tax Sops On Electric Vehicles

Delhi, one of the world's most polluted cities, will offer tax incentives on electric vehicles as it targets five lakh battery-powered vehicles on the road in the next five years to make air cleaner and generate employment.

The state targets 25% of all new registrations to be for electric vehicles by 2024, Chief Minister Arvind Kejriwal said while launching Delhi's EV policy for three years. That contribution, he said, now stands at 0.2%.

Delhi plans to waive registration fee and road tax, and provide financial incentives to buyers of EVs. The state under the new policy, he said, is the first in India to offer incentives to those who want to scrap their old vehicles.

While pollution levels have dropped during the pandemic as industrial activity and mobility froze because of the lockdown, India is home to 14 of the 20 most-polluted cities in the world. Delhi, with a population of 1.8 crore people, is right at the top among places with dirtiest air. Every winter, the national capital is engulfed in a blanket of toxic smog. Last year, the pollution climbed to 'poisonous' level, forcing schools to shut and construction to halt.

The Kejriwal government has tried restricting vehicles with odd and even registration plates on alternate days, but health experts don't see that as an effective way to curb pollution.

Kejriwal, however, said there has been a reduction of 25% in the pollution levels in the last few years. “The policy is a reflection of our intentions to a greener future," he said at the press conference. "We want to give a boost to the economy during the Covid-19 pandemic, create jobs and reduce the pollution levels in the national capital."

Incentives For Buyers

The Delhi government will offer an incentive of up to Rs 1.5 lakh on electric cars, and Rs 30,000 on battery-powered autos, two-wheelers, and e-rickshaws. It's setting up a dedicated state EV fund and a cell that will look after implementation. The incentives will be over and above the country’s FAME 2 scheme offers similar benefits.

Range anxiety or the fear that the vehicle will run out of battery, and pricing are the biggest hurdles for adoption of EVs in the country. To solve the issue of charging, the Delhi government wants to set up 200 charging stations in the next one year to have one every three kilometres.

"It's a holistic policy that addresses core EV challenges of subsidising cost differences with respect to internal combustion engine vehicles, financial incentives on loans, creation of charging stations and skill creations," Saurav Kumar, chief executive officer and founder at Euler Motors, a Delhi-based EV startup, said in a statement.

Sohinder Gill, director general at the Society of Manufacturers of Electric Vehicles, said the defined target and timeline has a potential to make the capital one of the leading states in terms of electric vehicle adoption. “The customers who were unable to get subsidy under the central government’s scheme due to certain restrictive norms now have a chance to avail subsidy under this scheme."

Gill, however, pointed out that the policy doesn’t support the lithium battery e-scooters with speeds up to 25 kilometre per hour, a popular fleet because of its attractive prices and extremely low running costs.