Toyota Seeks Tax Reduction for Hybrids in India

Jawad

23 Oct 2023

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Toyota Seeks Tax Reduction for Hybrids in India

Toyota has urged the Indian government to consider reducing taxes on hybrid vehicles by 21%, which is one-fifth less than the existing tax rate, according to a company letter cited by Reuters. The Japanese automotive giant argues that hybrid vehicles should receive regulatory incentives due to their significantly lower environmental impact compared to gasoline-powered vehicles.

Toyota's Call for Regulatory Incentives

Toyota maintains that the current tax differential of 43% for hybrids and gasoline vehicles is inadequate, given the environmental benefits of hybrid technology. For context, electric cars (EVs) in India are taxed at 5%. While the Indian government is promoting EV adoption, Toyota is striving to boost hybrid vehicle production to meet rising demand.

In its letter, the world's largest automaker is lobbying for an 11 percentage point reduction in tax for hybrid vehicles and a 14-point decrease for flex-hybrid options in comparison to petrol cars. This would result in a tax rate of 37% for hybrids and 34% for flex hybrids. Additionally, Toyota is also advocating for a government incentive program for hybrid vehicle buyers, akin to the one offered to EV purchasers.

Hybrid Vehicles in Environmental Context

Despite facing criticism from climate activists and investors, Toyota defends its focus on hybrid cars, arguing that they offer a practical solution in regions with less developed EV infrastructure. Toyota's stance is that the "most optimal way" to protect the environment is to encourage the simultaneous use of EVs and hybrid vehicles.

Toyota's History of Lobbying for Hybrid Technology

This is not the first instance of Toyota lobbying for government support of its hybrid technology. The company has pursued similar initiatives in its home market of Japan and in the European Union. In the EU, Toyota even threatened to discontinue hybrid cars if they were prohibited in favor of EVs, highlighting the manufacturer's commitment to hybrid technology on a global scale.

Toyota Hybrid Vehicles Tax Reduction Indian Automotive Market Environmental Impact Regulatory Incentives Electric Vehicles EVs Government Policy Climate Advocacy Global Automotive Industry

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