Here we go again! A potential U-turn in sight! And the government might just take it! What is it? It’s about the acceptance of hybrid cars. You see, in 2017, the government withdrew incentives on hybrid vehicles and placed them under the highest GST (Goods and Service Tax) slab of 28 per cent. What’s more, an additional cess of 15 per cent was slapped on vehicles with two engines in their powertrain. Do the math and the total applicable tax is a staggering 43 per cent!

Now, the Ministry of Heavy Industries and Public Enterprises (MHIPE) has set a proposal to incentivise hybrids under the FAME II (Faster Adoption and Manufacturing of Electric vehicles). Someone has clearly understood a simple fact which carmakers like Toyota and Honda have been pressing home for a couple of years. What is it? A hybrid vehicle will cater to the needs of the consumers during this massive transition from vehicles with internal combustion engines to battery-powered electric vehicles (EVs).

What kind of incentives? All pure electric cars will receive an incentive of Rs 10,000 per kWh. For example, if a car has a 10kWh battery, by simple calculation it will receive a total rebate of Rs 1 lakh from the government. In the case of hybrids, however, there is a catch. The MHIPE is proposing to give the same level of incentive to the dual-engine cars but there will be a threshold on their value. That threshold is currently unknown. What that means is a less expensive hybrid car will attract the same level of incentives as a pure electric car but the expensive ones will not.

For the record, the least expensive hybrid vehicle (mild-hybrids are not included) is the recently launched Toyota Camry. Toyota also sells the Prius hybrid in India. Apart from that, Honda has the Accord Hybrid and all Lexus models, except the LX SUV, feature hybrid powerplants. In the past, we’ve seen union minister Nitin Gadkari speaking about exploring alternate fuels such as methanol to power vehicles. If the idea of exploring alternate fuels is feasible, the idea of incentivising less-polluting powertrains should also be welcomed. At least, that’s where we stand!

Source: ETAuto