JSW MG Motor has requested the Centre to reduce goods and services tax (GST) on plug-in hybrid cars, which currently stands at 28 per cent. This is because it is the right “transition” technology till a full electric vehicle (EV) charging infrastructure is developed across India, its chief executive officer (CEO) Emeritus Rajeev Chaba told Business Standard on Friday.
“While talking to top government officials, we have been indicating that plug-in hybrid is the right technology for this country. It is a bridging or transition solution till EV infrastructure gets developed. Ultimately, we need to talk to the Society of Indian Automobile Manufacturers (Siam) also. And, we need to align the players, because there are definitely differences of opinion (within automakers),” he stated.
On July 5 last year, the Uttar Pradesh government issued an order removing registration tax on strong hybrid cars. This led to a tussle within the automobile industry.
Tata Motors, Hyundai Motor India, Kia India, and Mahindra & Mahindra strongly opposed the July 5 order, arguing that the nascent electric car industry in UP, one of India’s largest car markets, needs complete focus and support.
On the other hand, Maruti Suzuki, Toyota Kirloskar Motor (TKM) and Honda Cars supported the order. They argued that incentives should be extended to all green technologies, including plug-in and strong hybrids, as they can help the state reduce carbon emissions more quickly. The UP government did not change its decision.
Chaba said on Friday: “The government has shared that the direction of transition is towards EV and we are already moving towards that. So, on plug-in hybrids, we need to socialise. We need to talk and have some kind of an understanding.”
Plug-in hybrid cars have larger batteries that can be charged using an external power source, allowing them to run longer on electricity alone.
Strong hybrid cars — like Maruti Suzuki Grand Vitara and Toyota Urban Cruiser Hyryder — don’t need external charging and rely on a smaller battery that is charged by the engine and regenerative braking.
No car company, except a few luxury car makers like BMW, currently sell plug-in hybrid cars in India. JSW MG Motor plans to launch plug-in hybrid cars in the coming quarters.
When asked what kind of GST reduction JSW MG is hoping for, he said EVs are in the 5 per cent GST slab, and plug-in hybrids in the 28 per cent slab. So, the latter should be brought to somewhere between five per cent and 28 per cent, he added.
He stated that while the primary focus of the company is on launching electric vehicles, it will also be launching traditional petrol or diesel-run and hybrid cars.
“Within hybrids, we are going to focus on plug-in hybrids. So, most of our new cars will be based on a platform, where we can have an internal combustion engine (ICE), plug-in hybrid, and EVs on the same side. So, some of the growth will come from ICEs, primary growth from EVs, and some from plug-in hybrids. The share of plug-in hybrids depends on the tax structure as well as consumer acceptance. Consumer acceptance, we are quite confident of. But the tax structure will decide the price of the car, and that’s what is very important,” he stated.
