Elon Musk’s electric car company, Tesla, is understood have raised concerns to the Delhi government about its draft Electric Vehicle (EV) policy. The policy gives incentives for green cars but only for those priced below ₹30 lakh.
Tesla, which began operations in India only last year, currently sells the model Y in the market while also having long-wheel base of the car. Both the cars have ex-showroom prices of over ₹50 lakh, which would effectively rule them out of any incentives in the National Capital Region, which is one of the largest car markets in India.
The Model Y (5-seater) that gives a range of around 500km is priced at ₹50.89 lakh (ex-showroom), while the price of Model Y L (6-seater), the long-wheel base starts at ₹61.99 lakh (ex-showroom) with a range of up to 681 km.
Sources told businessline that Tesla, through its representatives including external consultants, has given a feedback to the Delhi government that putting a price cap in the incentives will be detrimental to the growth of high-tech electric cars, especially as the Indian EV market is at a nascent stage right now.
“Tesla believes that exclusion of their models from the proposed incentive scheme will be deterrent to those willing to purchase these cars in the Delhi-NCR markets. Tesla has an Experience Centre in Aerocity, Delhi, while having a large Tesla Center in Gurugram just to attract these customers,” a source aware of the developments told businessline.
The flagship Tesla showrooms are open in major metro areas like Mumbai, Delhi, and Gurugram, but even without local production, the company has direct deliveries and services available across 21 States in India. The company that entered India in mid-2025 sold 342 cars in FY26, and in April this year the company has sold 43 units followed by 35 vehicles in May.
Queries sent to Tesla India remained unanswered till the time of press.
Emerging market
Delhi is an emerging market for EVs because diesel vehicles, which are older than 10 years are banned from the city, and other two options are only petrol and CNG vehicles right now.
The proposed draft EV Policy 2.0 (2026-2030) is undergoing public consultations and is slated to bring strict mandates. As per the draft policy, all electric cars with ex-showroom price below or equal to ₹30 lakh registered in the NCT of Delhi will be granted 100 per cent exemption (50 per cent exemption on Strong Hybrid EV) from road tax and registration fees till March 31, 2030.
But, all electric cars with ex-showroom price above ₹30 lakh registered in the NCT of Delhi will not be granted any exemption from road tax and registration fees.
Also, a scrapping incentive of ₹1 lakh will be provided upon purchase of a new electric car under this policy, subject to an ex-factory price not exceeding ₹30 lakh, provided the purchase is made within six months of issuance of the Certificate of Deposit (CoD) from an authorised scrapping facility.
This incentive will be applicable for the scrapping of Delhi-registered BS-IV and below cars and will be limited to the first one-lakh eligible applicants under this policy.