In what may raise hackles among homegrown electric vehicle makers, the draft Delhi Electric Vehicle (EV) Policy 2026 offers a 50% road tax and registration fee exemption to strong hybrid electric vehicles priced below Rs 30 lakh (ex-showroom) till March 31, 2030.

While India’s Japanese-dominated car industry—Maruti Suzuki, Toyota Kirloskar Motor, and Honda Car India—has made a pitch for incentives on strong hybrid cars, homegrown carmakers such as Tata Motors and Mahindra and Mahindra (M&M) have strongly lobbied against any exemption for strong hybrid cars, stating that such a move could slow the adoption of battery electric vehicles.

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The draft Delhi EV Policy 2026 provides a 100% exemption in road tax to all electric cars with an ex-showroom price below or equal to Rs 30 lakh registered in the National Capital Territory (NCT) of Delhi. However, the incentives will not be applicable to EVs having an ex-showroom price above Rs 30 lakh, making a few top-end models of M&M’s born-electric XEV ineligible for the road tax waiver.

Electric car sales in India rose 84% year-on-year to around 2 lakh units in the financial year 2025-26, according to VAHAN data. On the other hand, sales of strong hybrid cars jumped 35% year-on-year to 1.12 lakh vehicles in FY26.

To be clear, electric vehicles attract 5% Goods and Services Tax (GST), while strong hybrid vehicles attract 18% to 40% GST, similar to regular internal-combustion vehicles.

Out of 47 lakh cars sold in FY26, 4.2% were electric, driven by a slew of new EV launches in the previous fiscal year. There are only eight strong hybrid cars compared to over 40 EV models in the country.

Toyota Kirloskar Motor dominates India’s strong hybrid segment, commanding more than 80% of the market with models such as the Urban Cruiser Hyryder SUV, Innova Hycross MPV, Camry sedan, and the premium Vellfire MPV.

Published on: Apr 11, 2026 11:22 AM IST