Domestic automakers Tata Motors and Mahindra & Mahindra are likely to emerge as key beneficiaries of Delhi’s proposed electric vehicle (EV) policy, which combines tax waivers, scrappage incentives and phased electrification targets to accelerate the shift towards clean mobility in the national capital.
The draft policy proposes a 100% exemption on road tax and registration fees for electric passenger vehicles priced up to ₹30 lakh, along with a scrappage incentive of up to ₹1 lakh for replacing older internal combustion engine vehicles. Strong hybrid vehicles will be eligible for a 50% concession, while higher-priced EVs will not receive any tax exemptions, signalling a targeted push towards mass-market electrification rather than luxury adoption.
Delhi, which accounts for about 4.3% of the country’s annual car sales, already has an EV penetration rate of 8.5%, nearly twice the national average. The new policy is expected to further widen this gap by reducing upfront acquisition costs and nudging consumers towards electric mobility in one of the country’s most premium and densely populated automotive markets.
Why Tata and Mahindra are better positioned to avail these benefits
Among automakers, Tata Motors and Mahindra & Mahindra are better positioned to benefit due to their relatively wider electric portfolio and earlier investments in the segment.
Both companies have steadily expanded their EV offerings over the past few years, helping them capture early demand in the country’s transitioning passenger vehicle market. This has also reflected in their market share gains, with Tata Motors increasing its PV market share to 13.04% in FY26 from 12.87% in FY25, while Mahindra & Mahindra rose to 13.42% from 12.42% over the same period.
Meanwhile, Maruti Suzuki India and Hyundai Motor India, which have been relatively slower in capitalising on the EV transition, have seen a moderation in their market share. Maruti Suzuki’s share declined to 39.71% from 40.20% in the previous period, while Hyundai Motor India’s fell to 12.29% from 13.48%.
Maruti Suzuki India, with its strength in strong hybrid technology, is better placed than Hyundai Motor India to benefit from the policy, which offers a 50% exemption on registration and road tax for hybrid vehicles. In contrast, Hyundai Motor India may be relatively more impacted, as despite the introduction of the Creta EV, it has yet to achieve meaningful scale in electric vehicle sales and also lacks a comparable strong hybrid portfolio, limiting its ability to fully capitalise on the policy incentives.
Investor sentiment reflected this divergence, with Maruti Suzuki and Hyundai Motor India declining 4.62% and 2.86%, respectively, on the NSE on Monday, while Tata Motors gained 0.88%. Mahindra & Mahindra, however, ended marginally lower by 1.53%.
The policy’s impact is expected to extend beyond passenger vehicles, with the two-wheeler segment poised for structural change. A mandate requiring only electric two-wheelers from April 1, 2028, is expected to accelerate electrification across the industry, benefiting companies such as TVS Motor Company, Bajaj Auto, Ather Energy and Hero MotoCorp, which together account for a dominant share of the country’s electric two-wheeler market.
Under the policy, electric two-wheelers priced up to ₹2.25 lakh are expected to receive direct subsidies of ₹30,000 in the first year, ₹20,000 in the second year and ₹10,000 in the third year, in addition to road tax and registration fee waivers and scrappage incentives. Electric three-wheelers, including e-rickshaws and goods carriers, are also expected to benefit from tiered purchase subsidies, while commercial electrification is set to receive further support through direct incentives and tax relief.
In the bus segment, manufacturers such as JBM Auto, PMI Electro Mobility and Switch Mobility are likely to benefit from the government’s push to electrify public transport, with school buses expected to follow a phased adoption trajectory of 10% by Year 2, 20% by Year 3 and 30% by March 2030.