According to Reuters, citing a company letter, Toyota is urging the Indian government to reduce taxes on hybrid vehicles by 21%, or one-fifth less than the current tax rate. The Japanese auto giant claims that hybrid vehicles should be given some kind of regulatory incentive because they are significantly less polluting than gasoline vehicles.
Toyota claims that considering the advantages of hybrid vehicles for the environment, the tax differential between hybrids (43%) and gasoline-powered vehicles (43%) is insufficient. For context, there is a 5% tax on electric cars (EVs) in India. While the Indian government appears keen to be pushing EVs, Toyota is trying to increase hybrid vehicle production to satisfy demand.
According to the aforementioned letter, the world’s largest automaker is lobbying for an 11 percentage points tax differential for hybrid vehicles and 14 points for flex-hybrid options against petrol cars. This would bring the tax for hybrids to 37% and flex hybrids to 34%. Furthermore, Toyota is also asking for a government incentive program for hybrid vehicle buyers, similar to the one offered to EV buyers.
Climate activists and investors are criticizing Toyota for pushing its hybrid cars, which Toyota defends by arguing that they make more sense in regions with less developed EV infrastructure. Toyota says the “most optimal way” to safeguard the environment is to use EVs and hybrid vehicles together.
This isn’t the first time that Toyota has been found lobbying a government to favor its hybrid tech. It has made similar moves in its home market of Japan, as well as the EU where it also threatened to quit if hybrid cars are banned in favor of EVs.
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com