Toyota

Japan’s Toyota Motor is asking the Indian government to slash taxes on hybrid vehicles by up to one-fifth, claiming they are significantly less polluting than petrol cars but do not receive equivalent policy treatment, according to Reuters.

The world’s largest automaker intends to increase manufacturing capacity to match a boom in Indian demand for hybrids, but government has prioritised electric vehicle (EV) sales, granting companies millions of dollars in incentives to create EVs and batteries.

EVs are taxed at 5 per cent in India, whereas hybrids are taxed at 43 per cent, barely below the 48 per cent levied on petrol vehicles.

Reuters reported that Toyota’s letter to Niti Aayog think-tank, which plays a vital role in policymaking, mentioned this 5-percentage-point gap favouring hybrids over petrol cars is “insufficient” considering the lower emissions and improved fuel efficiency hybrids offer and suggests the tax advantage over petrol automobiles should be as much as 11 percentage points for hybrids and 14 points for flex-hybrids.

According to Reuters calculations, this translates to a tax rate of 37 per cent on hybrids and 34 per cent on flex-hybrids, representing savings of up to 14 per cent and 21 per cent, respectively.

Toyota, which popularised hybrid technology with the Prius, has come under fire from investors and environmental groups for continuing to back hybrids, which it claims make more sense in regions where the infrastructure is not ready for EVs.