Delhi’s proposed Electric Vehicle (EV) Policy 2026 is expected to have only a limited immediate impact on automobile manufacturers, but it could pose a bigger challenge if other states introduce similar policies, according to a report by Morgan Stanley, ANI reported.
The report said Delhi accounts for only a small share of vehicle sales for most automobile manufacturers, and buyers could also purchase vehicles from neighbouring states. As a result, the direct impact on vehicle makers is expected to remain modest.
However, Morgan Stanley warned that the greater risk lies in the possibility of other states adopting similar policies aimed at phasing out internal combustion engine (ICE) vehicles.
The report said automobile manufacturers and dealers, particularly those in the motorcycle segment, are likely to oppose such measures because electric alternatives are still limited in several categories.
It cited Chandigarh as an example, noting that the city had earlier proposed banning ICE-powered two-wheelers but postponed the plan until 2027 following concerns raised by the industry.
According to the report, companies with a stronger presence in the electric vehicle market, including Hero MotoCorp, Bajaj Auto and TVS Motor Company, are better placed to manage any impact through their EV product portfolios, ANI stated.
For Eicher Motors, the report said the performance of its recently launched electric motorcycle could become increasingly important as regulations evolve.
Morgan Stanley also said that while improving air quality remains an important objective, faster scrapping of older vehicles across all categories would be the most effective way to reduce transport-related emissions.
The report further stressed the need to expand domestic battery cell manufacturing to strengthen India’s energy security as electric vehicle adoption increases.
Delhi’s proposed EV Policy 2026 outlines a phased plan to replace internal combustion engine vehicles in selected segments while offering financial incentives to encourage electric vehicle adoption.
Under the policy, only electric three-wheelers and commercial vehicles weighing up to 3.5 tonnes will be eligible for new registrations from January 1, 2027. New registrations of electric two-wheelers will become mandatory from April 1, 2028.
The policy also requires that 30 per cent of school bus fleets be electric by March 2030.
To support the transition, the Delhi government has proposed direct incentives worth Rs 70 billion, indirect incentives and infrastructure investments of Rs 80 billion, and the installation of around 32,000 charging points across the national capital.
