Delhi’s proposed ban on new petrol-powered two-wheelers and three-wheelers is expected to significantly accelerate electric vehicle adoption across India, according to a new analysis by CRISIL Intelligence. The research firm estimates that the move could add about 600,000 electric two-wheelers and about 11,500 electric three-wheelers to national sales, despite Delhi’s share in the overall vehicle market being relatively low.
In its impact note, CRISIL highlighted that the draft Delhi EV Policy 2026-2030 proposes to ban new internal combustion engine (ICE) three-wheelers from January 2027 and two-wheelers from April 2028. If implemented, the policy could increase India’s electric two-wheeler penetration to 21-23% by FY2029, compared to an estimated 18-20% without the policy. Similarly, electric three-wheeler penetration could increase to 40-42% from 38-40% under current projections.
CRISIL said the lifetime cost of ownership of electric two-wheelers and three-wheelers is already competitive with petrol-powered options. The incentives proposed under the Delhi EV Policy are expected to further strengthen the economic case for electric vehicles, encouraging faster adoption among consumers and fleet operators.
However, the report also points out some challenges. For example, school bus operators are not currently eligible for the subsidies available to state transport undertakings. CRISIL suggested that this segment may require targeted policy support to ensure a smooth transition.
The research firm stressed that Delhi’s move could have wider national implications. With 66 of the world’s 100 most polluted cities located in India, similar policy mandates across larger states could significantly accelerate the shift towards electric mobility in the country. This, in turn, could lead automakers to increase investments in electrification and accelerate localization of batteries, components and charging infrastructure.
The proposed policy follows Delhi’s ranking as the world’s most polluted capital in the IQAir 2025 World Air Quality Report. Vehicular emissions contribute about 23% to winter pollution in the city, with two-wheelers accounting for about 67% of Delhi’s registered vehicle population.
Apart from restrictions on new registrations, the draft policy also proposes a completely electric bus fleet for the Delhi Transport Corporation and the transport department, as well as a target to electrify 30% of school buses by 2030. The policy also outlines financial incentives and tax benefits to support buyers and operators during the transition.
The draft Delhi EV Policy 2026-2030 is currently open for public feedback till May 10, after which it is expected to be formally notified.