Santosh Iyer, MD & CEO of Mercedes in India, said that being an expensive technology, electrics need to be given lower tax rates so that their affordability is maintained against petrol/diesel and hybrid vehicles.
“Today, consumers are not ready to pay a premium for a sustainable mobility solution. They want the prices (of EVs) to be the same or even cheaper if possible (and) in that context, I think a continuation of difference in taxation will help in better adoption, or faster adoption, of EVs,” Iyer told TOI as the company drove in the Maybach EQS electric priced at nearly INR 2.3 crore (ex-showroom, Delhi).
Currently, the GST on electrics is 5%, while larger hybrids are taxed at 43% and regular petrol cars at 48%. “So, technically the govt has a three-tier approach, and the request is to just continue the approach so that it is beneficial in the long run,” Iyer said.
Companies such as Tata Motors, Mahindra & Mahindra and now Mercedes do not support the demand made by Maruti, Toyota and Honda that tax rates on hybrids should be brought down since they are relatively cleaner than pure petrol/diesel vehicles. Tata Motors’ passenger vehicles division MD Shailesh Chandra has come out strongly on the matter, saying any tax benefits on hybrids will be “regressive and waste of govt money” and will “slow down the pace of EV adoption” while making the green vehicles globally uncompetitive.
“You can’t confuse the country. From a tech perspective, incentivising hybrids is a regression for the country and makes us globally uncompetitive. Do you want the country to go slow on zero emissions tech?” Chandra had told TOI recently.
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