As per the latest report, Toyota lobbies India to cut down tax impositions on hybrid cars since they emit considerably less and return better fuel efficiency than internal combustion engine (ICE) cars.
Toyota has been singlehandedly responsible for democratising hybrid technology — both globally and in India. The Japanese carmaker wants the Indian government to cut tax impositions as much as one-fifth over the current rate. Toyota argues that hybrid vehicles emit far less emissions than petrol cars while also delivering better fuel efficiency.
Reports suggest that Toyota plans to set up a third manufacturing plant in India for the introduction of a new hybrid model. This step has been taken after a surge in demand for hybrid vehicles in India.
To meet the growing demand, Toyota wrote to Niti Aayog requesting the tax differential should be 11% between hybrid cars and petrol cars. Flex-fuel hybrid cars, on the other hand, are requested to have a differential of 14% over petrol-powered vehicles.
If the request gets approved, the tax rate will amount to 37% for hybrids and 34% for flex-fuel hybrids. This deduction could unlock new potential for hybrid and flex-fuel hybrid vehicles and further increase their demand in the market. Toyota believes that a mix of electric and hybrid vehicles is the “most optimal way” to reduce carbon emissions until a dependable infrastructure for electric vehicles becomes a reality.
Currently, the government levies a 43% tax on hybrids while petrol-powered cars attract 48%. Toyota argues that this 5% differential is “insufficient”, taking the reduced emissions and higher fuel efficiency of hybrid vehicles into consideration. The letter sent to Niti Aayog also mentioned a suggestion for a government incentive programme that offers discounts to hybrid car buyers, similar to what we have seen in the case of electric vehicles.