Karnataka plans tax waivers for hybrid cars, incentives for electric vehicles: Report

Karnataka aims to reduce levies and give financial incentives to firms in the clean mobility space, which includes a significant cut for hybrid cars, in what will be a shot in the arm for Toyota, Reuters reported, citing a state government document draft.  

Karnataka aims to do away with road tax and registration charges for hybrid cars that cost less than 30,000 dollars, versus 13% to 18% currently, as per the draft seen by the newswire.  

The draft further noted that the state aims to bolster "clean mobility vehicle adoption," which encompasses EVs, some hybrids and hydrogen-based vehicles. However, there is no deadline to finalise and unveil the EV policy. 

Reuters could not elicit a response from Karnataka's transport department. 

Toyota's push is different from that of M&M and Tata Motors which want to keep the focus on EVs noting that incentives for hybrids will harm the country's goals for their adoption, the newswire noted. 

State road and registration taxes are charged on top of federal sales tax of 5% for EVs and up to 43% for hybrids.

Over and above this, Karnataka aims to offer incentives of up to 25% on capital investments by those who make EVs or the components, which will differ as per the investment size and numbers employed, the draft stated. 

The draft shows Karnataka is likely to offer financial incentives ranging from 15% to 25% of the investment made by companies in fixed assets, such as land and machinery, for new factories or to expand existing ones. This will also be applicable to battery component makers or those who also make EV charging gear, it noted. 

The state's government has previously said it plans to raise up to $6 billion in new investments through a clean mobility policy, but has not made any other details public.