New Delhi

TheFinance Ministry has asked all ministries and departments to make electric vehicles (EVs) their "default and preferred choice" for staff car procurement, setting a price ceiling of Rs 20 lakh per vehicle.

In an office memorandum dated November 10, the Department of Expenditure said the revised Net Dealer Price (NDP) ceiling takes into account prevailing market prices, vehicle lifecycle costs and the government's efforts to promote electric mobility and reduce dependence on fossil fuels.

The NDP ceiling for EVs has been fixed at Rs 20 lakh, double the Rs 10 lakh limit prescribed for internal combustion engine (ICE) vehicles, including petrol, diesel and hybrid cars. The earlier guidelines issued in 2022 had fixed the ceiling at Rs 6 lakh.

Going forward, ministries and departments shall ordinarily procure EVs whenever their existing ICE staff cars are condemned or replaced.

Where a department considers EV procurement or deployment impractical and proposes buying an ICE vehicle, it will have to seek relaxation from the Department of Expenditure on a case-by-case basis. Such proposals require the approval of the administrative ministry's Secretary and concurrence of the Financial Adviser.

The ministry has also reiterated the 2022 instructions mandating the hiring of EVs by government departments. Any proposal to hire ICE vehicles will similarly require specific relaxation.

The move is part of the government's broader push to accelerate electric mobility, strengthen energy security, reduce fossil fuel dependence and cut carbon emissions. It also seeks to increase institutional demand for EVs through government procurement and hiring.