India is betting big on electric vehicles, but where does that leave the makers of hybrids?

Last Sunday was a decisive one for Toyota Kirloskar Motor. It was the day the GST Council met to review tax rates in a vast swathe of product categories. By the end of the meeting, rates on 66 products were brought down, including pickles, agarbattis and cashew nuts.

Hybrid cars — where Toyota’s India outpost is a pioneer of sorts with the Camry hybrid and with plans to launch many more such models — weren’t that lucky, and will attract a peak duty of 43% (28% GST plus 15% cess). Electric vehicles (EVs) will be taxed at 12% even as hybrids are bracketed along with luxury cars in the 43% tax stratosphere.

“We feel a little let down. There is a lack of policy clarity. It is better to be technology agnostic, set broad emission guidelines and let the consumer decide,” says Vikram Kirloskar, vice-chairman, Toyota Kirloskar Motor. The high tariff throws a spanner into the plans for the Prius, the fourth generation of which was launched earlier this year for just under Rs 40 lakh. On the back of robust consumer demand, Toyota had shifted to producing only the hybrid variant with imported kits.

 

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