The city administration agreed not to levy 12.5% VAT and to subsidize 15% of the Reva's base price. Buyers will also get a refund on road and registration tax. Accounting for subsidies the vehicle is expected to cost around $7,100.
"We are expanding our sales to Delhi," Chetan Kumar Maini was cited by The Times of India as saying, "We will be ramping our production capacities by five fold by the end of the year."
The Reva took 13 years of research and development and around $20 million investment to produce the tiny battery-powered car, which is made in Bangalore in India's south.
The car can be charged from an ordinary 220W socket. The manufacturer says 1 km will cost about 1 cent excluding maintenance expenses. The car can travel 80 km (50 miles) after one charge.
However, a company representative said the Reva was unlikely to challenge the "people's car" manufactured by Tata Nano, which is due to go on sale in October at less than $3,000 including taxes.
A representative for the Reva Electric Car Company, Nevan Kulkarni, said additional support from municipal authorities was required.
Air pollution is an urgent problem in New Delhi. In 2001, authorities switched all commercial and municipal public transport from diesel fuel to natural gas, which helped improve the environment, but in early 2008, pollution levels hit an eight-year low due to the increasing number of cars on the city's roads.
