Toyota Motor is lobbying the Indian government to reduce taxes on hybrid vehicles by a fifth, Reuters reported citing an official company letter that shows that these cause less pollution than petrol cars but fail to get the required policy treatment.
The company aims to ramp up production capacity to cater to the increasing demand for hybrids. However, the Indian government is incentivising investment in electric vehicles, the newswire reported.
The country’s EV taxes are at 5%, but hybrids are levied a 43% tax, as compared to the 48% tax on petrol cars, Reuters noted.
Toyota is of the opinion that the 5 percentage point difference in favour of hybrids over petrol cars is not sufficient, as these cars offer not only reduced emissions but also better fuel consumption, as per a a company letter to Niti Aayog, the newwswire reported.
Toyota India country head Vikram Gulati suggested in the letter that the tax differential should be 11 percentage points for hybrids and 14 points for flex-hybrids.
Toyota declined to comment on the letter but said the “most optimal way” to reduce carbon emissions was through a mix of electrified and alternative energy options, including EVs and hybrids.
Reuters reached out to Niti Aayog which did not offer a response.
Toyota has begun developing EVs while also pushing for hydrogen-powered cars, saying a “multi-pathway” approach is needed to solve the climate crisis.
In its letter, Toyota also asks India to bring hybrid cars under a government incentive programme that offers discounts to buyers, a scheme now available only for EVs, Reuters reported.