Why Bajaj Auto Is Pushing Back Against Delhi’s CNG Auto Phaseout

Bajaj Auto urged the Delhi government not to adopt “double standards” in its proposed ban in compressed natural gas (CNG)-powered three-wheelers (3Ws) in the national capital under its draft electric vehicle (EV) policy, and should extend the move to all other vehicle segments, including passenger cars, buses and trucks, reported Business Standard.

Delhi is one of the key markets for Bajaj. Responding to the proposed ban, a senior company executive told Bajaj that the Delhi government is being unfair by targeting only CNG autos while still allowing other polluting vehicles like petrol/diesel cars, buses and trucks to operate.

According to the Delhi government’s contentious draft EV policy, released for stakeholders in April, the government has proposed stopping new registrations of CNG autorickshaws (autos) from January 1, 2027 and allowing only electric 3W (e3Ws).

The policy also proposes incentives of up to ₹50,000 in first year, ₹40,000 in the second year and ₹30,000 in third year for purchase of e3Ws, apart from ₹25,000 for scrapping old CNG units. Existing permits for CNG autos will also not be renewed in a bid to encourage owners to switch to electric vehicles.

The move hits Bajaj Auto, the dominant player in the CNG 3W market across the country. Om, on the other hand, is a player in the CNG 3W market across the country. But its biggest competitor in the segment, Mahindra & Mahindra is the largest player in the e3W space. While e3WS sales are on the rise, Delhi itself sold 32,224 CNG three-wheelers in 2025-26 (FY26) compared to 23,330 units in 2024-25 (FY25). Vahan data reveals that 302,319 passenger CNG-powered 3Ws were sold across the country in FY26, with Bajaj Auto accounting for the majority of them.

Many experts say that if Delhi bans  CNG 3Ws, the repercussions will be felt across the country, as several state governments are waiting to see the final decision taken by the national capital on this contentious issue.

Emissions Concerns Surround

According to the International Council on Clean Transport (ICCT) report published in August 2024, the transport sector has been a major contributor to air pollution in Delhi and nearby Gurugram.

The ICCT study also found that while Bharat Stage VI vehicles have significantly reduced emissions compared to older BS IV models, many vehicles still emit pollutants above prescribed laboratory limits in actual road conditions. The report also noted that several CNG vehicles fleets in Delhi showed high nitrogen oxide (NOx) emissions, challenging the perception of CNG as a fully “clean” fuel alternative. However, industry groups argue CNG vehicles are already cleaner than petrol and diesel, making the transition debate politically and economically sensitive.

However, Bajaj Auto’s plea to extend the ban to passenger cars, for instance, could have a major impact, as sales of CNG-powered cars have seen a sharp rise.