Toyota urges India to slash tax on hybrid cars, says they are eco-friendly and fuel-efficient


New Delhi: Toyota Motor, the world’s largest car manufacturer, has appealed to the Indian government to lower the tax rate on hybrid cars, which use both battery and engine power. The Japanese company claims that hybrid cars are less polluting and more economical than petrol cars, and should be given tax benefits similar to electric vehicles (EVs).

In a letter to NITI Aayog, the policy think tank of the Indian government, Toyota has proposed to reduce the tax rate on hybrid cars from the current 43% to 37%, and on flex-hybrid vehicles, which can run on both petrol and ethanol, from 43% to 34%. This would mean a tax difference of 11 percentage points for hybrid and 14 percentage points for flex-hybrid compared to petrol cars, which are taxed at 48%.

Toyota argues that hybrid cars emit less harmful gases and offer better fuel efficiency than conventional petrol cars. The company cites a study by the International Council on Clean Transportation (ICCT), which found that hybrid cars can reduce carbon dioxide emissions by 25-30% and nitrogen oxide emissions by 80-90% compared to petrol cars.

Toyota also says that India’s tax structure makes the production of hybrid cars using batteries and motors 30-35% more expensive than their petrol counterparts. The company says that this discourages the adoption of hybrid technology in India, where the infrastructure for EVs is not yet ready.

Toyota has faced criticism from investors and climate groups for its support of hybrid technology, which they say is not enough to tackle the climate crisis. However, Toyota says that hybrid technology is better suited for markets where EVs are not feasible or affordable. The company has also started developing EVs and is focusing on hydrogen-powered cars as another alternative.

Toyota is not alone in its demand for tax relief for hybrid cars. Other carmakers like Honda Motors and Suzuki Motor have also expressed their interest in hybrid technology for India. They say that hybrid cars can bridge the gap between petrol and electric vehicles, and help India achieve its emission reduction targets.