The Indian government will keep a substantial tax difference between electric vehicles and hybrids to promote zero-emission technologies, confirmed G20 Sherpa Amitabh Kant, impacting automakers lobbying for lower GST on hybrids.
At a Mercedes-Benz Research and Development India event, G20 Sherpa Amitabh Kant emphasised the Indian government’s commitment to promoting zero-emission technologies by maintaining a significant duty differential between electric vehicles (EVs) and hybrids, which may be disappointing for automakers like Maruti Suzuki, Toyota, and Honda who have pushed for lower GST on hybrids. Kant outlined the government’s strategy to foster clean mobility through various policies, including maintaining a 5% tax rate on EVs compared to a 48% rate on hybrids for an extended period.
Japanese automakers have argued that hybrids, being cleaner than conventional petrol vehicles, deserve tax incentives, while other companies such as Tata Motors and Mahindra & Mahindra advocate exclusively for zero-emission technologies, opposing any concessions for transitional technologies like hybrids. Kant highlighted ongoing efforts to boost green mobility, including the rollout of large tenders for electric buses aimed at reducing costs and propelling India towards leadership in EV manufacturing.
Concurrently, the Uttar Pradesh government’s decision to waive registration taxes for hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) is anticipated to increase hybrid adoption. However, major Indian and international car manufacturers have expressed concerns that this may detract from the demand for fully electric vehicles and slow down the electrification of India’s transport sector.
