In a bid to promote eco-friendly vehicles in the state, the Uttar Pradesh state government has announced the complete removal of the registration tax on strong hybrid cars
Under the current models being sold, this will benefit manufacturers like Maruti Suzuki India Limited, Honda Cars India and Toyota Kirloskar Motor. Potential customers can benefit from over Rs. 4 lakh on the purchase of select models. Some examples of strong hybrid vehicles that are presently being sold are the Maruti Suzuki Grand Vitara, Maruti Suzuki Invicto, Toyota Urban Cruiser Hyryder, Toyota Innova Hycross, and Honda City e:HEV. All of them are covered under the offer being provided by the state government.
It is said that the UP government through a circular sent on July 5, has implemented the policy to give a 100 per cent waiver on the registration fees of strong hybrid electric vehicles and plug-in hybrid electric vehicles with immediate effect.
As of now, the UP government charges eight per cent road tax on vehicles costing less than ₹10 lakh, and 10 per cent on vehicles costing more than ₹10 lakh (on ex-showroom). According to FADA, UP is one of the largest markets for passenger vehicles in the country. The retail sales in the first half (H1) of this year is a staggering 2,36,097 units — a jump of 13.46 per cent compared with 2,08,092 units in January-June 2023.
“This will help the sales of strong hybrid vehicles in the State, although the number of buyers is small right now. Most buyers of such vehicles already own a vehicle, and first-time buyers are very less right now. Having said that, such a move by the Chief Minister Yogi Adityanath, will help the auto sector,” said, Ankit Raj, the Chairperson of Federation of Automobile Dealers Associations (FADA). The UP government announced the policy in 2022, and it has been implemented now, he said. In March 2023, the state announced a policy of zero registration costs on electric vehicles as well to promote EV sales.
MSIL sold around 1,000 vehicles only (strong hybrids of Grand Vitara and Invicto) last year. While the Grand Vitara Intelligent Electric Hybrid (strong hybrid) starts at ₹18.43 lakh, the Invicto strong Hybrid starts at ₹25.21 lakh (all ex-showroom, Noida). Prices of the rebadged Toyota models, Hyryder and Innova Hycross are also priced very similarly. HCIL, which sells only one strong hybrid may also get some boost in its sales, with this policy. The Honda City e:HEV starts with a price tag of ₹19 lakh (ex-showroom).
“It is clear that tax reductions on hybrids could be a significant catalyst, driving the move from pure internal combustion engine (ICE) to greener alternatives. While the adoption of EVs is certain, the journey requires hybrids. With the enhanced value offered by hybrid vehicles, consumers may reconsider their preference for pure gasoline models like the Kia Seltos or Hyundai Creta and instead, lean towards strong hybrid options such as the Toyota Hyryder and Maruti Suzuki Grand Vitara,” Puneet Gupta, Director, Sales and Powertrain Forecast, India & ASEAN, said.
We expect the other states to follow suit eventually but only after observing its effect on sales and it’s only a matter of time. This will boost vehicle sales which has already started to dip in the last 2 months.