People aware of the developments told ET that the government took the step from August 31. The removal of the incentive has led to a sharp rise in the purchase prices of electric vehicles, which has drastically affected sales, officials of the Federation of Automobile Dealers Associations (FAO) said.PALACE).
“The cost of purchasing an electric vehicle has suddenly increased by 10%. These vehicles are more expensive than their petrol or diesel counterparts. This further increase in the purchase price has abruptly affected the sales of two-wheeled and four-wheeled electric vehicles,” said an industry executive familiar with the matter.
“So far this month, registrations have fallen dramatically and are almost insignificant. In a few days we will have a clearer view of the market situation,” said the executive.
Delhi is one of India’s largest EV markets, accounting for about a tenth of total sales in the country. Industry stakeholders are scheduled to meet state transport authorities next week to air their grievances and seek a solution.
Confirming the Delhi government’s move, a second official said, “Delhi has been among the pioneers in adopting electric vehicles, primarily due to supportive policies. The state government was to take a decision on extending the ban.” exemption from road tax The Delhi government has taken the decision to ramp up sales of electric vehicles in the country over the past few months due to high vehicle prices, insufficient charging infrastructure and range anxiety among customers. India has around 12,000 public charging stations, compared to 87,000 fuel stations that dispense petrol and diesel. Sales of electric cars remained almost unchanged at around 29,500 units in the first four months of fiscal 2025. The pace of growth in the electric two-wheeler segment has also moderated. Several factors, ranging from concerns over the resale value of electric vehicles despite lower running costs, to worries over battery life and driving range, are causing some customers to prefer conventional fuel options.
Sales of electric vehicles fell 3% year-on-year in July, marking the third consecutive month of decline, raising fears that the Indian market may be reflecting a broader slowdown in global EV sales. FADA is yet to release vehicle registration data for August.
Rajeev Singh, Partner and Consumer Industry Leader at Deloitte Asia Pacific, confirmed that the slow adoption of EVs in the passenger vehicle segment is largely due to high acquisition costs and range anxiety among consumers. “EVs are typically 1.35 to 1.7 times more expensive than equivalent petrol cars,” he said.
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