MNCs, homegrown carmakers spar on hybrid car technology

It is becoming a story of homegrown versus global players in hybrid car technology. Players like Tata Motors and Mahindra & Mahindra (M&M) have decided to junk hybrid technology in the development of their cars, while multinationals like Maruti Suzuki, Toyota, and Honda are bullish on prospects of hybrid as far as the Indian market is concerned. Those in favour of hybrid are also pushing for relaxation of tax rates. 
 
When asked about his views on hybrid vehicles, Tata Motors Managing Director (MD) and Chief Executive Officer (CEO) Guenter Butschek said, “My view goes against the interest of many auto companies. I don’t need incentives for hybridisation. Hybridisation is a simple stupid electric attachment to an internal combustion engine (ICE), which we need in order to meet the regulatory environment. Why shall government budget go on this? The future in this country needs to be electric.” He said any incentive on hybrid was going to postpone the movement to electrification. Tata Motors had entered the electric vehicle (EV) space in October last year, winning a tender to sell electric cars. It is working on more electric products.
 
“This is a very sensitive, controversial, and emotional topic. There are battle lines drawn between various companies on what is what,” Pawan Goenka, MD, M&M, told Business Standard. He said he was not against hybrid. “If the thrust in India is on tailpipe emission and reducing crude oil import, electric is a full solution, while hybrid is a partial solution,” he added. M&M had introduced hybrid tech in its Scorpio SUV, but dropped all hybrid projects after it found the government direction was clearly in favour of EVs. M&M is currently the largest electric carmaker in the country.
 
The government has decided to give preferential treatment to EVs. Last year, while introducing the goods and services tax (GST), it decided to tax EVs at 12 per cent, while taxing small cars, with the internal combustion engine (ICE), at a minimum 28 per cent.
 

Plugged into hybrid car trend

Bigger vehicles, even if they are hybrid, attract an additional cess of 15 per cent and vehicles like Maruti Suzuki Ciaz and S-Cross (with smart hybrid features) have to pay this cess. Same is the case with Toyota Camry Hybrid. Sales of these vehicles have crashed after prices went up sharply after the introduction of the GST.
 
However, players with an interest in hybrid technology continue to lobby with the government for revisiting the taxation on these vehicles. And, they continue to work on expanding their hybrid range. “Even after 10 years, switching all cars to electric will be very difficult. If technology becomes affordable and we have the infrastructure, it will be a different story. But India is a big country and it is not easy to reach from one point to the other. Outside the big cities, we have to use diesel and petrol cars,” Kenichi Ayukawa, MD and CEO at the country’s biggest carmaker Maruti Suzuki, said early this month, adding hybrid can be the only solution to improve the efficiency of diesel and petrol cars. “We would like to push that technology in our future products to improve them,” said Ayukawa. The Suzuki-owned company has also been in dialogue with the government to restore incentives on hybrid vehicles.
 
Japanese auto major Toyota, which continues to sell the Camry Hybrid, said hybridisation and introduction of EVs do not have a conflict. “We need to take both of these forward simultaneously. The government direction is EVs and by 2030, 40 per cent of new cars should be EVs. But 60 per cent will still be ICEs. If we do not make any effort to improve the fuel efficiency in ICE engines, our crude oil import will increase. We need good fuel efficiency and the only solution in this area is hybrid,” Akito Tachibana, MD at Toyota’s India unit, said. Suzuki and Toyota have forged a partnership to manufacture EVs for the Indian market by 2020.
 
Yoichiro Ueno, president and CEO, Honda Cars India, said the parent company is one of the leading players in hybrid technology. “While hybrid is not a zero-emission vehicle, the best part is that it can significantly reduce emissions and won’t need any new infrastructure. India is a big country and will take time to construct enough number of charging stations. In the transition period, hybrid can be a good option, especially in suburban areas”.