Government incentives should be for EVs, not Hybrids: NITI Aayog Official

As the Delhi government considers offering tax waivers to promote hybrid vehicles alongside electric vehicles (EVs), a senior official from NITI Aayog has said that government incentives should be directed solely at EVs with zero tailpipe emissions.

Speaking exclusively to CNBC-TV18, Sudhendu Jyoti Sinha, Senior Advisor to NITI Aayog, said: “EVs cannot be compared to gasoline or hybrid vehicles. Hybrids are less polluting and fuel-efficient, but we have to see what our end goal is. The goal is to reduce dependence on fossil fuels and achieve net zero targets. Therefore, the government will be channelising incentives towards electric vehicles.”

Sinha’s comments come amid growing debate in India’s automotive industry over whether hybrids should receive the same benefits as EVs. While the Delhi government is exploring incentives for hybrid vehicles, Uttar Pradesh has already announced a 100% road tax waiver on them. Other states are also considering similar measures.
According to the International Energy Agency, more than 20% of new cars sold globally in 2024 were electric. Sales of electric cars surpassed 17 million last year, growing by over 25% compared to 2023. In China—the world’s largest EV market—plug-in hybrid electric vehicle (PHEV) sales have overtaken battery electric vehicle sales, with PHEVs making up nearly 30% of electric car sales in 2024, up from around 15% in 2020.

Sinha said Delhi’s upcoming EV policy would be “aspirational” and offer substantial incentives for electric vehicles. He added that NITI Aayog had advised Delhi and other states on the distinctions between EVs and hybrids.

Hybrid vehicles combine an internal combustion engine with an electric motor and battery, allowing the car to draw power from both sources either simultaneously or separately. While some automakers argue that hybrids can help India meet its climate goals, others say the technology has existed for decades and does not align with the government’s policy of supporting only advanced automotive technologies.

Recent media reports suggested the Prime Minister’s Office considers all clean vehicles—EVs and hybrids alike—eligible for support. Responding to these reports, Sinha said the PMO had made no such policy statement and confirmed there had been no shift in the government’s position on prioritising domestic manufacturing of electric vehicles.

Sinha also expressed optimism that the PM e-Bus Sewa scheme, now known as the PM e-Drive scheme, would exceed its targets for boosting the adoption of electric two- and three-wheelers. He indicated that the government may reallocate funds within the scheme’s existing ₹10,900 crore budget to increase subsidies for these segments.

He added that the government is likely to continue supporting electric mobility even after the PM e-Drive scheme ends in March 2026. “A review will be done later in the year, but the government will not take the extreme step of stopping all incentives. Incentives will continue to be given, especially for public transport and charging infrastructure,” he said.