In a setback to companies like Hyundai Motor India (HMIL), Mahindra & Mahindra (M&M), Tata Motors and Kia India, the Uttar Pradesh (UP) government has told them that there will be no change in the current policy and both electric vehicles (EVs) and strong hybrids will continue to have zero registration cost in the State.

A two-hour meeting was held with the stakeholders from the auto industry on Sunday by UP Chief Secretary Manoj Kumar Singh in Lucknow, where the decision was taken.

“Both EVs and strong hybrid vehicles will continue with the incentives because only 1.5 per cent EVs and 1.5 per cent of hybrid vehicles are sold out of the total passenger vehicles sold in UP right now. The rest 97 per cent are traditional internal combustion engine (ICE) vehicles so there is a need to increase the percentage of alternate fuel powered vehicles,” sources closed to the meeting told businessline.

Companies’ concerns over hybrid incentives

On August 2, companies including HMIL, Kia India, Tata Motors and M&M had written to the UP government opposing its recent move (July 5) to incentivise strong hybrid vehicles on the grounds that it would affect progression towards electric vehicles.

They had said that the same will not be beneficial as fossil fuels will continue to persist as original equipment manufacturers (OEMs) would adopt this technology for specific products segments to meet their CAFE (fuel efficiency) norms and related performance attributes.

These OEMs said that in the current scenario, the hybrid technology is made for premium segment and any road tax benefits or incentives for the hybrid technology would derail the electrification of the transport sector as a ‘major chunk of the government Budget would be taken by the hybrid vehicles.’

However, on Sunday, the UP Chief Secretary told them that in order to increase the share of environment-friendly vehicles in the State, “such steps have to be taken and also will look for more alternatives from time to time,” apart from this policy.

Policy review

“The Chief Secretary has told us that the current policy is till October 2025 only, and since the penetration of EVs and hybrids are very low in the State, a final decision can be taken in future too. As the technology evolves, there would be more policies for the alternate fuelled vehicles,” said one of the officials from the companies who wrote against the 100 per cent waiver on registration fee of strong hybrid electric vehicles and plug-in hybrid electric vehicles by the State.

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