Tata Motors Requests Government not to reduce Tax on Hybrid Cars, Toyota suffers Jolt

Tata Motors, one of the big automobile companies, has requested the Central Government not to give tax exemption on hybrid cars. Toyota, the leading company in the hybrid car segment, had demanded a tax cut on hybrid vehicles. Tata Motors has its presence in both the Internal Combustion Engine (ICE) and Electric Vehicles (EV) segments.

A Reuters report states that Tata Motors says that the tax on hybrid cars should not be reduced because they emit more pollution than EVs. Hybrid cars that use an electric battery pack with a petrol engine and an electric motor have a tax of 43 percent in the country. In comparison, petrol engine cars attract a tax of 48 percent. Five percent tax is applicable on EV under Goods and Services Tax (GST).

Toyota has a major share in the international market of hybrid cars. It debuted in this segment in the country with the Prius. Japan’s Toyota claims that hybrid cars have less carbon emissions than petrol engine cars. Late last year, the Trade Promotion and Industry Ministry had requested heavy industries ministries to make the cess on hybrid cars balanced. However, Tata Motors is against it. The demand for hybrid cars has increased in the country in the last few years. Because of this, many automobile companies like Maruti Suzuki and Honda have launched their models in this segment.

It has been said in this report that Tata Motors has held a meeting with government officials on this issue. Along with this, the company has written a letter to the Trade Promotion and Industry Ministry saying that the air quality is bad in the cities of the country. Giving incentives to hybrid cars will not be in the interest of both the environment and the economy. Tata Motors ranks first in the electric car segment in the country. It believes that EV is a better solution to deal with air pollution and reduce dependence on crude oil imports. Earlier, the company had also opposed giving tax exemption on import of electric cars to American EV maker Tesla.