According to a letter from Toyota Motor Corp, the automaker is seeking a reduction in taxes on hybrid cars in India. Toyota claims that hybrid cars are less polluting than gasoline cars, but that they do not receive the same political treatment. The company plans to expand production capacity to meet the growing demand for hybrids in India. However, the Indian government has focused on promoting electric vehicles (EVs), offering incentives to companies to build EVs and batteries.
Currently, electric cars are taxed at just 5%, while hybrids are taxed as high as 43%. Toyota believes that this difference of 5 percentage points is insufficient given the reduction in emissions and better fuel consumption that hybrids offer. The company proposes that the tax difference for hybrids should increase to 11 percentage points and 14 points for flexible hybrids. This would result in a tax rate of 37% for hybrids and 34% for flexible hybrids, representing potential cuts of up to 14% and 21% respectively.
Toyota argues that commensurate policy support is needed to encourage the adoption of hybrids. The company has faced criticism for continuing to support hybrids instead of fully transitioning to electric cars. However, Toyota considers hybrids to be a better option for markets where the infrastructure for electric vehicles is not yet sufficiently developed.
In addition to the tax cuts, Toyota is also requesting that hybrid vehicles be included in a government incentive program that currently only applies to electric vehicles. This program provides discounts to buyers of electric cars.
Overall, Toyota says that a combination of electrified and alternative energy options, including electric cars and hybrids, is the most optimal way to reduce CO2 emissions and tackle the climate crisis.
– Reuters: New Delhi, 23 October 2023 – “Toyota urges India to cut taxes on hybrids”
– Reuters: “Toyota urges India to cut taxes on hybrids”
Frequently asked questions
1. What is Toyota requesting from India regarding taxes on hybrid cars?
Toyota is calling for a tax cut on hybrid cars in India because it believes they are less polluting than petrol cars and do not receive the same political treatment.
2. What is the difference in taxes between electric and hybrid cars in India?
Currently, electric cars are taxed at just 5%, while hybrids are taxed as high as 43%.
3. Why does Toyota claim that the tax differential between electric and hybrid cars in India is insufficient?
Toyota considers the 5 percentage point difference in taxes insufficient, as hybrid vehicles offer significant emission reductions and better fuel economy compared to gasoline-powered vehicles.
4. What is Toyota proposing regarding tax differential for hybrid cars in India?
Toyota is proposing to increase the tax gap for hybrids to 11 percentage points, which would result in a tax rate of 37% for hybrids. It also suggests that flexible hybrids have a tax differential of 14 percentage points with a tax rate of 34%.
5. What is Toyota’s overall view on the adoption of hybrid and electric cars?
Toyota says that a combination of electrified and alternative energy options, including electric cars and hybrids, is the most optimal way to reduce CO2 emissions and tackle the climate crisis.