Two-Wheelers Present Bigger Challenge for Delhi EV Policy: Crisil Ratings

The two-wheeler category presents a bigger challenge for the recently announced Delhi EV policy, which will ban the registration of conventional-engine bikes and scooters from April 2028, with electric penetration in the segment at just 7.3% in Delhi in FY26, according to Crisil Ratings.

While the 'April 2028 EV-only registration' requirement provides a clear roadmap for the two-wheeler industry to accelerate investments in electric products, capacity and distribution, internal combustion engine (ICE) models are expected to remain relevant in the near term, Crisil Ratings Director Poonam Upadhyay told PTI.

The future growth in Delhi's two-wheeler market will increasingly be linked to EV readiness, she said, responding to a query about the policy's implications for ICE manufacturers, especially in the two-wheeler category.

"The impact on ICE manufacturers will vary across segments. In two-wheelers, the transition is expected to be gradual, with EVs accounting for only 7.3% of Delhi's registrations in FY26," Upadhyay noted.

Elaborating, she said, "Two-wheelers present a bigger challenge. Despite registrations rising about 25% to 5.7 lakh units in FY26, EV penetration stood at just 7.3%. Under the draft policy, all new two-wheeler registrations would be required to be electric from April 2028, supported by incentives of up to ₹30,000 per vehicle in the first year, tapering over the following two years." While scrappage benefits and tax exemptions are available under the policy, Upadhyay said, "As financial support gradually reduces, pricing competitiveness and ownership economics are likely to become increasingly important in sustaining EV uptake." Passenger vehicles, however, face more measured evolution, she said, adding, "Unlike two-wheelers, the policy does not mandate EV-only registrations for private cars, relying instead on incentives to encourage adoption".

"As a result, ICE vehicles are likely to remain relevant over the medium term, with the pace of electrification continuing to be shaped by factors such as vehicle pricing, charging convenience and model availability," Upadhyay noted.

In FY26, Delhi registered about 2 lakh four-wheelers, including nearly 77,000 EVs (39% penetration) and about 52,000 hybrids, she added.

Under the policy, a 100% exemption from road tax and registration fees is provided to all EV four-wheeler passenger vehicles registered in the national capital with an ex-showroom price of ₹30 lakh or less.

Upadhyay said that, among vehicle segments, three-wheelers face the earliest shift, with EV-only registrations set to begin from January 1, 2027.

"Its success, however, will hinge on adequate vehicle supply, financing access, and charging and battery-swapping infrastructure," she noted.

Electric vehicles accounted for nearly two-thirds of 55,700 registrations of total three-wheelers in FY26, Upadhay said.

Overall, she said the Delhi EV policy signals one of India's most ambitious state-level electrification pushes, seeking to accelerate electric mobility through a calibrated mix of registration mandates, targeted fiscal incentives and clear preference for pure electric vehicles over hybrids.