Major automobile companies including Hyundai Motor India (HMIL), Kia India, Tata Motors and Mahindra & Mahindra (M&M) have written to Uttar Pradesh government opposing its recent move to incentivise strong hybrid vehicles on the grounds that it would affect progression towards electric vehicles.

“The same will not be beneficial as fossil fuels will continue to persist as OEMs would adopt this technology for specific products segments to meet their CAFE (fuel efficiency) norms and related performance attributes,” said HMIL in the letter. businessline has seen the letters written by these original equipment manufacturers (OEMs).

The UP government, through a circulation dated July 5, had implemented the policy to give “100 per cent waiver on registration fee of strong hybrid electric vehicles and plug-in hybrid electric vehicles” with immediate effect.

Companies such as Maruti Suzuki India (MSIL), Toyota Kirloskar Motor (TKM) and Honda Cars India (HCIL) benefit under this scheme. The move was making customers of these cars benefit up to ₹3.5-5 lakh.

EVs to be hit

However, companies like HMIL and M&M 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’.

Spokespersons at HMIL, M&M and Tata Motors declined to comment on the matter.

The OEMs said that no fiscal and non-fiscal incentives/ exemption to those vehicles which do not qualify the performance and eligibility criteria as defined in Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME)-II policy/ guidelines should be considered.

“Under the ‘Buyer Definition’ in the UP EV Manufacturing and Mobility Policy 2022, any incentives for hybrid vehicles should not be considered. It is important to note that hybrid technology is only an inermediate technology between internal combustion engine (ICE) and EV and any incentives such as a road tax exemption to hybrid vehicles will delay the overall objective of net zero goals in India,” said one of the OEMs.

However, sources at the beneficiary companies told businessline that the UP government has clearly mentioned that the only reference it has taken from FAME-II scheme is on efficiency and performance, which these companies have matched.

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