Hybrid car tax relief may distort market, hurt EVs: Mercedes-Benz CEO
Mercedes-Benz India, the nation's leading luxury carmaker, argues that any tax relaxation on petrol-battery hybrids could cause industry distortion and hinder the adoption of zero-emission electric vehicles, ToI reported. Mercedes contends that lower tax rates for electric vehicles (EVs) are essential to maintain their affordability compared to 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,» said Santosh Iyer, MD and CEO of Mercedes India.
Currently, the Goods and Services Tax (GST) on electric vehicles is 5%, whereas larger hybrids face a 43% tax and regular petrol cars are taxed 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 added.
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Mercedes-Benz's stance is aligned with companies such as Tata Motors and Mahindra & Mahindra, who also oppose the request by Maruti, Toyota, and Honda to lower tax rates on hybrids. They argue that hybrids, despite being cleaner than straightforward petrol or diesel vehicles, do not align with the desired shift towards electric vehicles.
Tata Motors' passenger vehicles division MD Shailesh Chandra has
