Tata Punch EV Charging

Tata Motors stresses commitment on net-zero goals with electric vehicles

In a recent statement, Shailesh Chandra, the Managing Director of Tata Motors’ passenger vehicles and passenger EV divisions, cautioned against any move to lower tax rates on hybrid cars in India. Chandra argued that such a step would not align with the nation’s broader goals of achieving net carbon-zero, improving air quality and reducing fossil fuel imports.

The Department for Promotion of Industry and Internal Trade (DPIIT) and the Ministry of Heavy Industries in India are currently exploring the possibility of rationalising taxes on hybrid passenger vehicles, a move that has stirred debate within the automotive industry.

Chandra emphasised that hybrid vehicles, which use a small battery pack and heavily rely on a fossil-fuel engine, essentially function as gasoline-run vehicles. He expressed concerns that providing incentives for hybrids could be a “misguided effort” by some OEMs, stating that existing technologies like Gasoline Direct Injection (GDI) and Compressed Natural Gas (CNG) already contribute to fuel efficiency without additional incentives.

India presently imposes a GST of 28 percent on hybrid vehicles, while electric vehicles face a 5 percent GST. Chandra pointed out that there is already a 2 percent lower cess on hybrid vehicles, highlighting existing benefits.

The automotive industry in India finds itself divided on this issue. On one side, Tata Motors, Mahindra & Mahindra and South Korean carmakers Hyundai and Kia oppose tax cuts for hybrids. On the other side, Japanese automakers Toyota, Suzuki and Honda, leaders in hybrid technologies, are pushing for rationalising GST on hybrid vehicles.

Tata Motors, committed to focusing solely on electric vehicles, has consistently opposed the idea of hybrids in the past. Chandra emphasised that offering benefits to hybrids could confuse the investment profile of all OEMs and divert attention from the primary goal of transitioning to zero-emission technologies.

Which side are you on – hybrid vehicles or electric vehicles? Let us know in the comments section below.