Suzuki and Toyota Face Obstruction from India's Hybrid Vehicle Reforms

Auto companies such as Maruti Suzuki, Toyota and Honda, G20 Sherpa Amitabh Kant announced on Tuesday that the government will maintain a large duty differential between electric vehicles and hybrids to promote zero-emission technologies and green mobility in India. Speaking at an event organized by Mercedes-Benz Research and Development India (MBRDI), Kant affirmed the government's commitment to clean mobility through various policy measures.

"We've had a policy framework where the tax on electric vehicles is 5% as compared to 48% on hybrids, which we intend to continue over a long period of time," Kant stated.

Japanese companies like Maruti Suzuki, Toyota, and Honda have been lobbying to reduce GST rates on hybrids from 48%, arguing that hybrids are cleaner than pure-petrol vehicles and should be incentivized. However, companies such as Tata Motors and Mahindra & Mahindra oppose this suggestion, asserting that only zero-emission technologies should receive incentives and intermediate measures should not get concessions.

"Our policy is that we push for more and more electrification in mobility through all the policy levers available, including CAFE norms. So we will relentlessly push for India becoming a green mobility destination," Kant said.

Kant also mentioned the government's efforts to foster the adoption of electric buses. Following a tender for about 6,000 electric buses for seven cities, he indicated that larger tenders would be rolled out in the future.

"The next tender we are doing is for 10,000 buses and the third tender would be for 50,000 buses. So, the size and scale would help in bringing down the prices of electric buses in a big way."

He warned that if India doesn't adopt cleaner technologies, it risks missing out on becoming a leader in EV manufacturing.