- Petrol and CNG vehicles in Delhi could soon attract a green cess as the government looks to push EV adoption under its revised electric vehicle policy.
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Check Offers Petrol and CNG vehicles could soon become costlier in Delhi, as the city government weighs extending its existing green cess beyond diesel vehicles to cover all ICE-powered models. This proposal is part of a draft electric vehicle policy that is aimed at encouraging the shift to cleaner mobility.
According to officials, the draft policy proposes a 1–2 per cent levy on new petrol and CNG vehicles. Diesel cars, which currently attract a 1 per cent cess, could also see the charge raised to 2 per cent. If implemented, the move would directly raise the on-road prices of conventional vehicles, narrowing the price gap between ICE models and EVs.
The policy is expected to be finalised by March, subject to cabinet approval. Officials suggest the expanded cess framework is one of several methods being considered to slow new purchases of petrol, diesel and CNG vehicles, while simultaneously pushing buyers towards electric alternatives.
Delhi introduced the green cess under its EV Policy 2020, which expired in August 2023 but has since been extended until March 2026. While the idea of widening the levy was discussed in earlier drafts of the new policy, many proposals were later dropped, making the final scope of the cess dependent on cabinet clearance.
Electric vehicles currently account for roughly 12–14 per cent of monthly vehicle registrations in the capital, based on VAHAN data. Of the nearly eight lakh vehicles registered in Delhi so far this year, about 1.11 lakh are electric. The government has indicated that it wants to significantly raise this share using a mix of incentives for EV buyers and additional costs for conventional vehicles.
Delhi launched its original EV policy in August 2020 and set an ambitious target of 25 per cent EV adoption in new registrations. Key incentives such as road tax and registration fee waivers, alongside subsidies of ₹5,000 per kilowatt-hour of battery capacity, will likely continue under the revised policy.
Beyond the proposed cess, the draft policy outlines further measures such as reduced interest rates on EV loans, incentives for scrapping and replacing older cars, and financial support for charging infrastructure and battery swapping. The policy also proposes a separate levy for vehicles over 10 years old at the time of PUC renewal, covering two-wheelers, as well as passenger and commercial vehicles. Officials estimate this alone could generate around ₹300 crore annually, which would be channelled into EV adoption programmes.
Industry experts remain cautious about the effectiveness of a marginal cess increase, noting that high upfront costs remain the biggest barrier to EV adoption. They argue that while such levies may influence buyer sentiment, stronger structural measures are required to hasten the transition.
The draft EV policy will shortly be available to the public for suggestions and stakeholder feedback before it goes for cabinet approval.
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First Published Date: 28 Dec 2025, 16:49 pm IST
