With EV Policy In Cold Storage, Hybrid Vehicles Likely To Get A Massive Fillip
Hybrid vehicles, which offer a combination of and are also considered a bridge between conventional fossil fuel-based engine vehicles and fully battery-operated electric ones, may get sops and other non-monetary benefits from the government in the future. The development comes amidst Union Road Transport Minister Nitin Gadkari taking a U-turn by not formulating any policy on Electric Vehicles. It has also been learnt from reliable sources that the current cess surcharge of 15% on Hybrid vehicles may be done away with. However, GST rates of 28% may not come down soon and no benefits will be extended to mild hybrid vehicles.
According to a source privy with the development, “While Japan nurtures plug-in hybrid vehicles, European countries are promoting hydrogen or fuel cell-run vehicles in addition to BEVs. China, on the other hand, rules the roost in terms of battery-run electric vehicles. A lot of Japanese automakers, through a series of hectic parleys, have urged the central government to provide an equitable thrust on hybrid electric vehicles till the point when the infrastructure (charging stations) for Battery Electric Vehicles (BEVs) are built on a massive scale. Since the majority of these Japanese carmaking giants are known for their expertise in hybrid vehicles than pure electric vehicles, the government has relented on its earlier stand on going for 100% e-mobility (by 2030). In the first phase, the 15% cess on HEVs could be done away with. In the subsequent phase, GST rates (at 28%) may be further pruned depending on the market scenario. However, these plans are at a very nascent stage and no firm decision has been taken so far.”
It may be recalled that Hybrids were earlier considered at par with battery electric vehicles and were available with incentives. However, the government last year segregated both of them by withdrawing tax benefits from the former which resulted in a gross tax rate of 43% (28% GST+15% cess).
Puneet Gupta, associate director at IHS Markit, a sales forecasting and market research firm, stated, “Skipping hybrid revolution is not the way to move to electric vehicles especially for the Indian market. We feel that gradually promoting hybrid vehicles will encourage more OEMs to eventually lead to technology development which will pave the way for 100% electric cars in India. I think we should not forget we are a Japanese dominated car industry and the Japanese are way behind their counterparts (in Europe) in electric car revolution. I think bringing benefits on hybrids will be a big relief for automakers in India and also this will help automakers to plan their further product portfolio with much confidence. We may see investments coming up as uncertainties reduce in India.”
N. Raja, Deputy Managing Director, Sales & Service, Toyota Kirloskar Motor said, “The focus of the government should be on lowering emissions and energy use from well to wheel and let the customer finally decide which technology is most suitable to him. India needs to promote both hybrid and electric, because one will lead to better utilization of the other. The more hybrids you sell, the greater are the chances of electric (vehicles) succeeding and vice versa. Because when the battery costs drop, vehicle costs will also drop. The big difference between hybrid and electric cars is that electric vehicle needs charging infrastructure. Strong hybrids are in fact electric vehicles fitted with an internal combustion engine. But with the current high air pollution levels, hybrid is very fuel-efficient and low on emissions. India, where 73% of electricity is produced by burning coal, we need to be conscious of well-to-wheel emissions, in such scenario hybrids stand much better than EVs.”
Jnaneswar Sen, Senior Vice-President, Sales and Marketing, Honda Cars India Ltd., maintained, “For electric vehicles to flourish, charging stations need to be built and be omnipresent. In the interim, we can have hybrids, whether they are conventional HEVs or plug-ins, as an intermediate step towards achieving an all-electric goal by a specific timeline. If the government grants subsidies or lowers the taxes on such products, we would not mind bringing some of our globally acclaimed models etc.”
