Toyota Drive for Greener Roads: Toyota, the world’s largest carmaker, is making a case to the Indian government for significant tax reductions on hybrid vehicles. They argue that hybrid cars are considerably less polluting than petrol vehicles but don’t receive equivalent policy support. While India taxes electric vehicles (EVs) at just 5%, the levy on hybrids is as high as 43%, just below the 48% imposed on petrol cars.
Toyota contends that this 5-percentage-point differential favoring hybrids over petrol cars is “insufficient.” They propose that the tax differential should be as much as 11 percentage points for hybrids and 14 points for flex-hybrids, resulting in significantly reduced tax rates for these vehicles. The automaker believes that this adjustment would better reflect the reduced emissions and improved fuel efficiency that hybrids offer.
In a letter to Prime Minister Narendra Modi’s Niti Aayog think-tank, Toyota’s India country head, Vikram Gulati, called for “proportionate policy support.”
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While India is currently focused on promoting EVs and offers incentives to companies for their production, Toyota emphasizes the importance of hybrids in markets where EV infrastructure is not yet fully established.
Toyota’s stance on hybrids has drawn criticism from some quarters, but they argue that a multi-pathway approach, including EVs and hybrids, is necessary to combat climate change. The company is calling for India to include hybrid cars in government incentive programs that currently offer discounts only for EVs.
The outcome of this lobbying effort could have implications for the future of hybrid vehicles in India and the global automotive industry, where the transition to cleaner transportation options is a key focus. Toyota’s advocacy for hybrid technology underscores their belief in its relevance in markets with unique challenges and opportunities.