Delhi Govt Withdraws Road Tax Waiver On EVs, Sales Take A Hit

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SUMMARY

The decision to withdraw the road tax waiver on electric cars and two-wheelers was taken on August 31

The withdrawal of the incentive has led to a sharp rise in prices and impacted sales “drastically” in the first few days of September

Industry stakeholders now plan to meet state transport authorities next week to convey their grievances and seek a resolution

The Delhi government has withdrawn a waiver of road tax on electric cars and two-wheelers, which has reportedly hit electric vehicle (EV) sales in the national capital.

Industry insiders told Economic Times that Delhi authorities withdrew the waiver on August 31.

“… The state government was to take a decision on extension of road tax waiver on EVs. But that did not happen even though the cap on the number of vehicles to get the benefit has not been reached. The gains accrued so far stand to get derailed if the matter is not resolved quickly,” an official told ET.

As per the report, industry executives said that the development has led to a sharp rise in prices and impacted sales “drastically”.

“The cost of purchasing an electric vehicle has suddenly gone up by 10%. These vehicles are more expensive than their petrol or diesel counterparts. This added increase in purchase price abruptly has severely hit sales of electric two-wheelers and electric four-wheelers,” an industry executive reportedly said.

The executive further added that registrations so far in September have been “almost negligible”.

Industry stakeholders are planning to meet state transport authorities next week to convey their grievances and seek a resolution.

The latest policy blow comes at a time when EV two-wheeler sales have been swinging like a pendulum so far in 2024. While registrations declined 18% month-on-month (MoM) in August, the number surged 34% MoM in July. In April, sales cratered 50% on a monthly basis.

On similar lines, electric car sales have been on a continuous decline for three straight months. The decline has largely been led by factors such as high prices, insufficient charging infrastructure and range anxiety among customers.

The development comes at a time when the Centre is planning to roll out the third iteration of the Faster Adoption & Manufacturing of Electric Vehicles (FAME) scheme. On September 4, union minister for heavy industries HD Kumaraswamy said that the much-awaited FAME-III scheme will be rolled out within two months.