Govt proposes hybrid car subsidy in India, takes a U-turn

New Delhi: ₹13 crore subsidy has been asked by the department of heavy industries from the expenditure finance committee (EFC) to promote hybrid cars. A shift from the government’s earlier refusal to offer subsidies on such vehicles.

The department sought incentives for potential buyers of 10,000 hybrid cars fitted with lithium-ion batteries of 0.5-2 kilowatt-hour (kWh) in a meeting with the committee for the second phase of the Faster Adoption and Manufacturing of Electric and Hybrid vehicles (FAME) scheme.

Some Indian firms such as Mahindra and Mahindra Ltd and Tata Motors Ltd supported the transition directly to electric cars. Mahindra has e2O and e-Verito in its electric car line-up while Tata has the Tigor electric.

Automakers such as Toyota Kirloskar Motor Pvt. Ltd (Prius and Camry hybrid cars) Maruti Suzuki India Ltd (Ciaz hybrid) and Honda Cars India Ltd, favours India promoting hybrid cars.

Several Japanese firms have been unhappy with the lack of government support. After the government’s decision to place hybrids under the highest GST slab of 28% plus 15% cess hampered sales, Toyota withdrew its hybrid cars from India.

Last year, the government placed hybrid cars in the highest slab of GST. But electric cars were put in the 12% slab, signalling the government’s intent to promote only electric vehicles.

According to R.C. Bhargava, chairman of Maruti Suzuki, the government has now come around to the view that electric vehicles alone will not be able to solve the problems of oil imports and rising pollution. From now till 2030, only 10-15% of the total vehicles will be electric. “So something needs to be done about the 85% of the vehicles,” he said.