Extending incentives and tax benefits created specifically for electric vehicles (EV) to hybrid models will defeat the main objective of promoting emission-free EVs, Shailesh Chandra, managing director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility told Fe.
Chandra’s comments come in the background of aggressive lobbying by a clutch of carmakers including Toyota Kirloskar, Maruti Suzuki and Honda Cars with policy makers for reduction in taxes on vehicles using hybrid technology.
“The (sales) comparison (between EV and hybrid) is possibly done to shift the attention to hybrid to get the same benefit as what EVs get of the progressive policies of the government. This would be very strange because the whole intent of the policy primarily is for the net carbon zero commitment, as a hybrid (vehicle) still emits (particulate matter) PM 2.5,” added Chandra.
A hybrid car uses two individual sources of power – a petrol engine and a battery pack – for propulsion. While there are just two plug-in hybrid models in India (both priced above Rs 1.25 crore), all other hybrid vehicles in the country use the fossil fuel-powered engine under the hood to recharge their batteries. Plug-in technology uses grid electricity for charging the batteries.
Maruti Suzuki Grand Vitara and Invicto, Toyota Hycross, Urban Cruiser Hyryder and Camry, Honda City Hybrid, Mercedes S-Class and GLE, BMW XM, Lexus ES, Volvo XC60, Audi A8L are some of the several hybrid cars available in India.
“The objectives of the EV policy is not getting served by hybrids. If this whole movement is towards attracting the policy attention towards hybrids, it does not meet any of the objectives,” Chandra added.
The government has rolled out a variety of schemes to promote the adoption of EVs. This includes the reduced goods and services (GST) of 5%, direct subsidy under the Faster Adoption and Manufacturing of Electric and hybrid vehicles (FAME), tax savings on interest paid on loan availed for buying an EV and production linked incentive (PLI) scheme for batteries.
Hybrid vehicles, however, are taxed on par with petrol and diesel-powered vehicles, that is 28% and 15% compensation cess, bringing the total to 43%. No cess is applied on small cars powered by hybrid technology.
While Tata Motors believes that it does not see the need to have hybrids in its portfolio, Mumbai-based Mahindra & Mahindra announced a change in its stance on hybrids. The SUV-specialist who is strongly pursuing EV technology, stated in November that it can explore hybrid technology at an ‘appropriate time’.