Tax waivers for hybrid cars in UP seem like an experiment that, if successful, can be implemented in other states as well
To ensure faster adoption of EVs, both central and state governments have been offering subsidies on electric vehicles. In UP, users can now save on hybrid vehicles as well by choosing strong hybrid models from Maruti and Toyota.
Enquiries for hybrids nearly double
Owing to its massive size and population, UP is among the largest auto markets in India. The UP government has been working proactively to boost the state’s economy and is keen to implement new ideas. That’s where the decision to introduce tax waivers for hybrid vehicles starts to make sense. It appears that Maruti and Toyota have lobbied for tax incentives for hybrids and their proposal has been accepted.
Tax waivers for hybrid cars have already started achieving the desired results. That’s evident in the increasing consumer interest in hybrid vehicles. According to dealerships, enquiries for hybrids have increased significantly in recent weeks. There are substantial savings to be made via the tax waiver scheme. For example, the Camry sedan is available with an effective cost reduction of around Rs 4.32 lakh. Similarly, folks buying Toyota Vellfire in UP can save around Rs 13.10 lakh. Similar savings are applicable on other strong hybrid models from Maruti and Toyota.
Opposition from pure EV manufacturers
Interestingly, the decision to incentivize hybrid car sales is facing resistance from OEMs such as Mahindra, Tata Motors and Hyundai. These brands have expressed concerns that such incentives for hybrids will adversely impact sales of pure electric vehicles. They had lobbied to reverse the UP govt’s decision, but it seems that their efforts were unsuccessful. If other states also start giving incentives for hybrid cars, it will create significant challenges for EV manufacturers.
Many OEMs have envisioned an all-EV ecosystem for the future and have invested heavily in developing their EV portfolio. Govt subsidies have been playing a key role in motivating people to shift to EVs. If hybrids also start getting incentives across the country, it could result in slow growth or even negative growth of EVs.
Maruti, Toyota set aggressive sales targets
As they appear to have lobbied hard for the tax waivers on hybrids, Maruti and Toyota have set stringent sales targets for dealerships. A dealership reported that they have been asked to sell at least 250 cars per month. To achieve that, dealerships have stepped up focus on selling hybrids. As there is no surety about how long the tax waiver scheme will be available, customers are being asked to expedite their purchase decision.
In the greener fuel space, EVs were the second to be launched in India after CNG. Strong hybrids came later. Brands like Toyota have considered hybrids to be better than pure EVs. Key reasons being issues with charging EVs and high entry cost associated with pure EVs. Hybrids are less polluting and also give higher mileage. With supporters on both sides, it appears that the Indian auto industry is heading towards an EV vs hybrid battle in the future.
