Pollute less, pay less tax - the ideal vehicle tax philosophy
₹10,000 per kWH of battery for BEVs. Unlike its Japanese counterpart Suzuki Motor, with which it now has a joint manufacturing arrangement in India, Toyota was long content to milk the market for its top-selling Multi Utility Vehicles, premium sedans and high-end SUVs, after failing to make an impact in the affordable hatchback and sedan markets. In fact, close to 39% of its September sales volumes came from rebadged hatchbacks and compact SUVs, including mild hybrids, manufactured by Suzuki.
Toyota now seeks to level the playing field, advocating for a wider tax difference between conventional and hybrid vehicles, emphasizing a larger reduction for flex fuel hybrids. The issue isn't about favoring Toyota but crafting policies that achieve desired outcomes, leaving the means to industry dynamics. India aims for net zero emissions by 2070 and has set interim targets, including a 45% reduction in the emissions intensity of its GDP by 2030.
With India being a major fossil fuel consumer and importer, decreasing emissions and consumption offers multiple benefits, from environmental to energy security. It is here that hybrids have a case. According to a US Department of Energy study, an all-electric light passenger vehicle (car) has a total lifecycle (well-to-wheel) CO2 emissions which is just 22% of the lifecycle emissions of an equivalent petrol-engine vehicle.
A plug-in hybrid has 38% of the emissions of an ICE vehicle while a conventional mild hybrid has 54% of the lifecycle emissions of a conventional fossil fuel vehicle. It then stands to reason that even a mild hybrid will help in reducing both fossil fuel emissions and fossil fuel consumption. A well-designed vehicle tax policy, should, therefore, ideally work to
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