Why Delhi removed strong hybrid vehicles from EV policy

The Delhi government’s new electric vehicle (EV) policy, approved by the state’s Cabinet on Monday, offers no benefits to strong hybrid vehicles. This comes over two months after the draft EV policy, published on April 11, proposed a 50% road tax and registration fee exemption for strong hybrid electric vehicles priced below Rs 30 lakh (ex-showroom) till March 31, 2030.

The draft Delhi EV policy released for public consultation in April had proposed a 50% road tax exemption for hybrid cars, but the provision was dropped after consultations with stakeholders, Delhi Transport Secretary Niharika Rai said at a press briefing on Monday alongside Chief Minister Rekha Gupta.

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So, why did the Delhi government make a U-turn on giving concessions to strong hybrids?

Homegrown electric vehicle makers such as Tata Motors Passenger Vehicles and Mahindra & Mahindra (M&M) have invested billions of dollars in electric vehicles. The draft policy, which offered some benefits to strong hybrid vehicles, could have jeopardized electric vehicle sales in the national capital.

EVs already face many barriers such as high upfront costs, range anxiety, and lack of charging infrastructure. A policy promoting strong hybrid cars could have slowed the adoption of battery electric vehicles.

A similar episode played out in neighbouring Uttar Pradesh last year, when the country's largest state rolled back incentives for strong hybrid cars.

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EVs and strong hybrid cars are also taxed differently. While EVs attract 5% Goods and Services Tax (GST), strong hybrid vehicles are taxed at 40% GST like regular internal-combustion engine (ICE) vehicles.

While Japanese carmakers such as Maruti Suzuki and Toyota Kirloskar Motor have supported incentives for strong hybrid cars, Tata Motors PV and Mahindra and Mahindra (M&M) have lobbied against any tax exemption to strong hybrid cars.

Tata Motors Passenger Vehicles welcomed the Delhi government’s decision to exclude strong hybrid cars from incentives.

“Delhi has once again demonstrated leadership in doing the right thing. By retaining ambitious electrification timelines for high-usage vehicle segments and focusing policy incentives on pure EVs, the government has reinforced the principle that public support should benefit and accelerate technologies that deliver the maximum environmental benefit with zero-emissions,” Tata Motors Passenger Vehicles, the country’s largest electric car manufacturer, said in a statement.

“This policy provides long-term direction for the industry, strengthens confidence in India's EV ecosystem and can serve as a benchmark for other states pursuing cleaner urban mobility,” the company said.

In an interview to Business Today earlier this year, Mahindra Group CEO & MD Anish Shah had lauded the Union government's efforts to incentivise electric vehicles and not hybrids. "Hybrid is a short-term technology. And that will frankly, take away from EVs as charging infra will not come up as much,” he had said.

Electric car sales in India surged 84% year-on-year to over 200,000 units in the 2025-26 financial year, according to VAHAN data. Sales of strong hybrid cars also recorded robust growth, rising 35% from a year earlier to 112,000 units during the same period.