The Delhi government has approved a new electric vehicle (EV) policy that notably excludes strong hybrid vehicles from receiving any financial benefits. This decision marks a significant U-turn from a draft policy published just over two months prior, which had proposed a 50% exemption on road tax and registration fees for strong hybrid electric vehicles priced below Rs 30 lakh (ex-showroom) until March 31, 2030.
Why Delhi Reversed its Stand on Hybrid Incentives
According to Delhi Transport Secretary Niharika Rai, the provision for strong hybrid cars was dropped after extensive consultations with various stakeholders. The primary rationale behind this reversal is to safeguard the substantial investments made by domestic electric vehicle manufacturers, such as Tata Motors Passenger Vehicles and Mahindra & Mahindra (M&M), in pure battery electric vehicle technology.
Policymakers expressed concerns that promoting strong hybrid cars could potentially undermine the sales of battery electric vehicles (BEVs) and slow their overall adoption in the national capital. EVs already face hurdles like high upfront costs, range anxiety, and a developing charging infrastructure. Incentivizing hybrids might divert consumers away from fully electric options.
Industry Reactions and Policy Alignment
The decision by the Delhi government echoes a similar move in neighbouring Uttar Pradesh last year, where incentives for strong hybrid vehicles were also rolled back. The tax structure further highlights the distinction: pure EVs attract a 5% Goods and Services Tax (GST), while strong hybrid vehicles are taxed at 40% GST, identical to conventional internal-combustion engine (ICE) vehicles.
While Japanese automakers like Maruti Suzuki and Toyota Kirloskar Motor have advocated for incentives for strong hybrid cars, Indian manufacturers such as Tata Motors PV and M&M have actively lobbied against any tax exemptions for hybrids.
Tata Motors Passenger Vehicles, India’s largest electric car manufacturer, lauded Delhi’s new policy. In a statement, the company said, “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.” They added that the policy provides long-term direction and strengthens confidence in India's EV ecosystem.
Mahindra Group CEO & MD Anish Shah had previously described hybrid technology as a “short-term technology” that could detract from EV growth by hindering the development of charging infrastructure.
Impact on Vehicle Sales
Despite the policy shift, both segments have shown robust growth. In the 2025-26 financial year, electric car sales in India surged by 84% year-on-year, surpassing 200,000 units. Strong hybrid car sales also recorded significant growth, increasing by 35% from the previous year to reach 112,000 units during the same period, according to VAHAN data.
The Delhi government’s new policy aims to provide a clear long-term direction, focusing public support on technologies that offer maximum environmental benefits through zero emissions.