Toyota Urges Modi Government to Decrease Taxes on Hybrid Cars

The Japanese automaker Toyota has written to PM Modi-led Indian government to decrease the taxes on hybrid vehicles, stating that the current taxes compared to petrol vehicles are insufficient. The automaker says that hybrid vehicles don't get apt policy

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The Japanese automaker Toyota has written to PM Modi-led Indian government to decrease the taxes on hybrid vehicles, stating that the current taxes compared to petrol vehicles are insufficient. The automaker says that hybrid vehicles don't get apt policy treatment despite being less polluting than conventional ICE vehicles.

Toyota Urgs Modi Government to Decrease Taxes on Hybrid Cars

In a letter to Niti Aayog, the country head in India, Vikram Gulati, stated that the tax differences over petrol cars should be 11% and 14% points for hybrid and flex-hybrids, respectively. Gulati also urged the center to decrease the taxes by 21% for hybrid cars.

Currently, the center charges 48% tax on petrol and 43% on hybrid cars. As per Toyota's recommendation, if accepted, the taxes on hybrid and Flex hybrid cars would be 37% and 34%, respectively, making these vehicles cheaper for end customers.

Toyota's response comes at a time when the government is promoting the adoption of electric vehicles to replace conventional fuel vehicles in the market. Hybrid cars combine the petrol powertrain and electric motor, reducing fuel consumption and lower emissions. However, these vehicles are more expensive than conventional petrol cars but have affordable pricing than EVs. In short, these vehicles fall in between the petrol and electric vehicle categories.

The automaker has a range of hybrid cars in India, including the Toyota Camry, Urban Cruiser Hyryder, HyCross, and Vellfire MPV. The center hasn't yet responded to Toyota's request.

What If the Government Reduces Taxes on Hybrid Cars by 21%?

With the 21% cut on hybrid and flex-hybrid vehicles, hybrid cars in India will become more affordable for end customers. The initiative will also boost the sales figures of hybrid cars and play a pivotal role in reducing emissions and improving air quality.

Additionally, India lacks adequate charging infrastructure to ensure proper charging for electric vehicles. Thus, going hybrid seems more practical and logical as it fills the gap between ICE and BEVs.

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