UP Recognises Hybrid Vehicles' Role in Emission Cut with Tax Sops, Maruti Notes

Maruti Suzuki India Chairman RC Bhargava stated that the Uttar Pradesh government's decision to waive 100 per cent registration fees for hybrid vehicles acknowledges the necessity of diverse technologies to cut carbon emissions and reduce oil imports. Reports indicate that this waiver will lower hybrid vehicle prices by up to Rs 3.5 lakh.

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Bhargava mentioned that this initiative by the UP government could motivate other states to adopt similar measures. He highlighted that this is the first instance where a state government has recognised and acted on the need for multiple technologies to address carbon emissions and oil dependency. "Electric cars are not the only option; hybrid cars are also effective," Bhargava emphasised.

Impact on Maruti Suzuki Shares

On Tuesday, Maruti Suzuki shares surged 6.6 per cent, closing at Rs 12,820.20 on the BSE. During the trading day, the shares peaked at Rs 12,955, marking a 7.72 per cent rise. At the NSE, Maruti Suzuki shares increased by 6.51 per cent to Rs 12,807, making it the top gainer in both Sensex and Nifty indices.

Hybrid vehicles combine an internal combustion engine with one or more electric motors powered by energy stored in batteries. Toyota Kirloskar offers models like Innova Hycross and Urban Cruiser Hyryder with strong hybrid technology. Maruti Suzuki also features strong hybrid options in its Invicto and Grand Vitara models.

Current Tax Structure

The total tax incidence on hybrid vehicles in India is currently 43 per cent, including GST. In contrast, battery electric vehicles attract a significantly lower tax rate of about 5 per cent. This disparity highlights the financial challenges faced by hybrid vehicle buyers compared to those opting for electric vehicles.

Honda also markets some variants of its mid-sized sedan City with self-charging hybrid technology. This variety in hybrid vehicle offerings underscores the automotive industry's efforts to provide multiple solutions for reducing carbon emissions.

The UP government's move is expected to make hybrid vehicles more accessible and affordable for consumers, potentially leading to increased adoption of these environmentally friendly technologies across India.

This development marks a significant step towards promoting sustainable transportation solutions in India. By recognising the importance of diverse technologies, the UP government sets a precedent for other states to follow suit in their efforts to combat climate change and reduce oil imports.