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In the heart of India’s capital, thousands of electric vehicle (EV) owners are facing an unexpected hurdle. Their promised financial subsidies remain trapped in a bureaucratic maze. More than 26,800 subsidy requests, worth over ₹42.5 crore, are still pending with the Delhi Transport Department. The reason, officials say, lies in the long delay in finalizing the city’s new EV policy, which has been awaiting approval for nearly two years.
According to officials, these subsidy claims piled up over the past ten months, with only a few getting processed. The slow disbursal has frustrated many EV buyers who had turned to electric vehicles encouraged by the state’s ambitious incentives under the Delhi Electric Vehicle Policy, launched in August 2020.
The 2020 policy had been a game-changer when it came into effect. It offered direct purchase incentives up to ₹30,000 for two-wheelers and ₹1.5 lakh for four-wheelers, along with exemptions on registration fees and road tax. The result was remarkable. Delhi saw a surge in EV registrations, with electric vehicles making up over 8% of new vehicle registrations in 2024.
However, this success story began to slow down after August 2023. The previous policy lapsed that month and was later extended till March 2026. Yet, the transition did not go smoothly. Officials admit that the process of drafting a new framework and securing approvals caused significant delays. Administrative bottlenecks further worsened the situation, leaving thousands of applications hanging in uncertainty.
A senior transport department official explained that the disbursal of EV subsidies slowed down after the extension because of pending approvals and the absence of a finalized framework. The department has since initiated a review of all pending applications to identify and remove duplicate claims. “Once the approvals come through, subsidies will be released in batches, and the backlog will be cleared within this fiscal year,” the official added.
Another major factor behind the delay is the Lieutenant Governor’s order last year, which temporarily suspended several government subsidies, including those for EVs, during a period of policy revision. This led to a pile-up of claims that could not be verified or processed in time.
To fix these issues, the transport department has now formed a new committee to vet all EV models eligible for incentives under the upcoming policy. The panel will evaluate vehicles based on parameters such as price, energy efficiency, and performance. Officials hope this will bring greater transparency and ensure that the benefits reach genuine buyers.
The government is also planning to introduce a new digital verification system through the national Vahan portal. This will help automate claim processing and reduce manual errors and delays. With this technology upgrade, authorities expect to streamline the disbursal of funds and minimize fraudulent claims.
Despite these payment delays, Delhi’s EV movement continues to grow. The city now has more than 4.3 lakh registered electric vehicles, most of which were added after 2020. This growth reflects the strong public interest in switching to cleaner transport options, even as financial incentives remain uncertain.
The delay, however, risks dampening enthusiasm among new buyers. Subsidies were meant to make electric vehicles affordable and accelerate their adoption. Without timely disbursements, potential buyers may hesitate, fearing bureaucratic hurdles. Dealers too are feeling the impact as delayed subsidies affect their sales and cash flow.
Experts believe that while the policy vision is strong, its execution needs improvement. The capital has made significant strides in building charging infrastructure and awareness about sustainable mobility. But unresolved administrative delays could undo much of that progress.
A final decision on the new EV policy is now awaited from the transport ministry. Once approved, it is expected to bring updated rules that align with current market trends and technologies. Officials say that once the framework is cleared, pending claims will be prioritized, and fresh applications will be processed faster.
For now, EV owners in Delhi can only hope the government shifts gears soon. The city’s electric mobility transition, once hailed as a national model, is now at risk of losing momentum. Unless the subsidy bottleneck is cleared quickly, Delhi’s dream of becoming India’s EV capital may remain stuck in neutral.
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