Automakers oppose hybrid car incentives in Uttar Pradesh

Hyundai, Kia Motors, Tata, and Mahindra are lobbying against Uttar Pradesh’s decision to offer hybrid car incentives. They argue it undermines the push for electric vehicles (EVs) and disrupts investment plans.

Uttar Pradesh, which accounts for 10% of India’s car sales, recently waived registration taxes on some hybrid cars, making them 10% cheaper. This move saves up to $5,200 on a Toyota Camry hybrid. Hyundai, Kia, Tata, and Mahindra, who don’t sell hybrids in India, oppose the waiver, fearing it will derail the goal of 30% EV sales by 2030.

Hyundai, preparing for a $3 billion Indian IPO, warned that the incentive would “derail” transport electrification. Tata argued that favouring hybrids jeopardizes the industry’s $9 billion EV investment.

India’s federal tax on EVs is 5%, while hybrids are taxed at 43%, just below gasoline cars at 48%. Hybrid proponents argue that due to limited charging infrastructure, hybrids are a necessary interim solution. Maruti supports promoting hybrids alongside EVs to reduce oil imports and CO2 emissions.