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Toyota Urges Indian Govt to Reduce Taxes on Hybrid Vehicles: Report

Toyota is urging the Indian government to reduce taxes on hybrid vehicles, claiming that they are more environmentally friendly than petrol cars.

The company has sent a letter highlighting that hybrid vehicles do not receive the same policy treatment despite their lower emissions.

As demand for hybrids in India increases, Toyota plans to expand its production capacity in the country. However, the government has focused on promoting electric vehicles (EVs) and offers incentives for EV and battery production.

EVs are taxed at 5%, while hybrids are taxed at 43%, just below the 48% tax on petrol cars. Toyota argues that the 5% tax differential is not enough considering the reduced emissions and better fuel efficiency of hybrids.

The company has presented this argument in a letter to the Indian think-tank Niti Aayog.

Toyota believes that hybrids make more sense in markets without sufficient EV infrastructure.

While Indian companies like Tata Motors and Mahindra & Mahindra support EVs, Japanese automakers like Toyota and Honda support hybrids.

Toyota also states that the country’s tax structure and the use of expensive parts make hybrid production more costly, increasing the price of hybrid vehicles by 30-35% compared to petrol cars.

Toyota has requested the government to include hybrids in the incentive program currently limited to EVs.

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