Toyota urged Modi govt to reduce taxes on hybrid cars: Report

Toyota is lobbying the Indian government to slash taxes on hybrid vehicles by around 21 per cent. The Japanese car manufacturer has claimed that hybrid vehicles cause far less pollution compared to petrol cars but don't get commensurate policy treatment, news agency Reuters reported citing the company's letter to the Niti Aayog. 

Electric vehicles (EVs) are taxed at just 5 per cent but hybrid vehicles are taxed as high as 43 per cent, just below 48 per cent levy imposed on petrol cars. Toyota has said in its letter that this 5 percentage-point difference favouring hybrids is "insufficient", given reduced emissions and better fuel consumption that come with hybrid vehicles. 

The Japanese car manufacturer's lobbying efforts come at a time when the Modi government is pushing for a transition to EVs. Hybrid vehicles combine petrol engine with an electric motor to reduce fuel consumption and emissions. Hybrids are more expensive than petrol cars but also cheaper than EVs. 

The tax difference over petrol cars should be around 11 percentage points for hybrids and 14 percentage points for flex-hybrids, the news agency quoted Toyota's India country head Vikram Gulati as saying. "We would kindly request for a proportionate policy support," Gulati said in the letter.

If affected, this implies a tax rate of 37 per cent on hybrids and 34 per cent on flex-hybrids, cuts of as much as 14 per cent and 21 per cent respectively. The automaker further said that India's tax structure and use of more expensive power-train makes producing hybrids "30 per cent-35 per cent costlier than its petrol counterparts".

The power-train used in hybrids includes an engine and electrified parts like batteries and motors. Not only this, the automaker also urged the government to bring hybrid cars under a government incentive programme which offers discounts to buyers, a scheme available for EVs at present.

Toyota further said that the "most optimal way" to tackle carbon emissions was through a mix of electrified and alternative energy options, including EVs and hybrids. At present, Toyota sells several models under its hybrid vehicles segment in India including Camry, HyCross, Urban Cruiser Hyryder and Vellfire MPV. 

With inputs from Reuters

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