Several companies believe that for India to move towards 100% electric mobility the most suitable next step is using hybrid technology
Sport utility vehicle specialist Mahindra & Mahindra will focus on developing electric vehicles, and for its new partner Ford, even as competitors like Maruti Suzuki, Toyota and Honda put their weight behind hybrid technology.
The maker of Scorpio and Bolero is presently engaged in developing an affordable electric vehicle solution for one of Ford’s sedans, which is yet to get a formal approval from both the companies.
Several companies, especially Japan-based entities and Sweden-based Volvo, believe that the most suitable next step for India to move towards 100 percent electric mobility is using hybrid technology.
Companies are seeking a lower duty structure on hybrid vehicles, which essentially use a combination of petrol/diesel engine and an electric motor. Presently hybrids are taxed at 43 percent, including a 15 percent cess, putting it on par with other pure petrol and diesel vehicles.
Electric vehicles (EVs), however, carry a goods and services tax (GST) of just 5 percent. India’s transport ministry has pitched for a lower GST on hybrid vehicles too but not on par with EVs.
“Hybrid technology is not a focus right now for Mahindra and neither it is for Ford in India. Ford may have hybrids plans in other parts of the world but not in India,” said Pawan Goenka, the managing director of M&M, when speaking to analysts.
The government’s plans of incentivizing hybrids through tax cuts may not be welcomed by all the automotive players. Tata Motors, which is gearing up to launch the electric version of the Nexon compact SUV in early 2020, has opposed any plans of incentivizing hybrids.
“There is no need to incentivise hybridisation since it will come anyway. If the government is allotting budgets for incentives or tax benefits on the GST side, it should purely be focused on electrification to create a mass movement to leapfrog to this technology,” Tata Motors told Moneycontrol in an earlier statement.
When asked if M&M will look at hybrids in future, Goenka responded, “We are kind of keeping the plate warm. If there is a change in the government regulation in India for hybrid then we will jump into the fray but right now we are not doing much on hybrids.”
Certain hybrids do not require external charging mechanism as the energy generated from braking or from conventional engines is used for propulsion. In such cases, the government’s intention of having a nation-wide network of EV chargers will prove to be redundant, thereby rendering investments in them totally fruitless.Further, since hybrids still use petrol or diesel, government will still have to import the fuel in large quantities and also worry about emission which is otherwise zero in a fully-electric car.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.