Toyota Fights for Fair Hybrid Vehicle Tax in India

Toyota is fighting for its preferred hybrid powertrain vehicles in India which are being hit by far higher import taxes than BEV products.

The automaker is lobbying the Indian government to cut taxes on hybrid vehicles by as much as 21%, arguing they are far less polluting than other powertrains but do not get appropriate treatment by the nation’s taxing system in a company letter, Reuters reports. Toyota is hoping for a surge in hybrid vehicle sales in India but is facing tax levies of 43%, just below the 48% applied to ICE vehicles, while taxes for BEVs stand at just 5%.

Indian Prime Minister Narendra Modi's government has focused on pushing sales of BEVs, offering companies millions of dollars in incentives to build them and their battery packs. Toyota argues the slight tax advantage for hybrids over ICE cars is “insufficient”, when taking into account the greatly reduced emissions and better fuel consumption hybrids offer.

Both Toyota and Honda favor the expansion of hybrid powertrain technology over forced mass adoption of BEV arguing it makes better sense for markets where the infrastructure is not ready for EVs.

It’s also worth pointing out that more than half of India’s electricity production to feed BEVs is from burning coal meaning the vehicles will have a much larger carbon footprint accelerating global warming than hybrid powered cars.