Tata Against Hybrid Incentives, May React If Market Develops

Tata Motors may consider adding hybrid powertrains to its portfolio if market dynamics demand it, according to Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility. “We will be hoping to use the technology to deliver value to the customer and obviously it [hybrids] would be under consideration for different products at different points in time,” he said. This could signal a shift in the company’s stance amid a policy environment increasingly supportive of hybrid vehicles in certain Indian states. 

“From a powertrain mix perspective, we've kept it [hybrids] in the category of petrol,” Chandra said. “If competitiveness requires us in certain segments to bring hybrid, we’ll bring it. It might not be just because of emission reasons, but performance reasons also,” he added. 

Chandra noted that the company’s internal powertrain forecast sees 30% of its mix coming from electric vehicles, 27% from CNG, and about 6–10% from diesel, with the remaining volume accounted for by petrol, which includes hybrids. “We will be hoping to use the [hybrid] technology to meet the value we would be hoping to deliver to the customer. We exist in a market to compete, we're not against a technology, we're against the use of incentives in benefit of a technology which is self-viable,” he added, underscoring that any adoption would be segment-specific and time-dependent. 

The remarks come at a time when states like Uttar Pradesh and Karnataka are offering or contemplating tax benefits for hybrid vehicles, bringing them closer to electric vehicles in terms of fiscal incentives. Uttar Pradesh has already waived registration tax on hybrids, while Karnataka is reportedly mulling similar concessions.

“Our focus is EVs. We believe this is the destination technology and we need to double down on this and we’re doing that,” Chandra affirmed. “Hybrids we consider as one of the technologies for improving competitiveness on the ICE side. If market demand comes, we can respond to that.”

But Chandra also voiced concerns that extending incentives to hybrids—technologies he believes are already commercially viable—could derail India’s broader EV ambitions.

“The issue for us is on the incentive side or any extraordinary benefit being given to hybrids like taxation rates,” he said. “Then the question is open for many technologies on the ICE side. Why digress the focus from destination technologies where you have barriers which have to be overcome? If there’s money to be put by the government, that should be on the destination technology.”

Currently, electric vehicles benefit from a lower 5% GST rate at the national level, compared to 43% on hybrids. But states, which control vehicle registration taxes, are increasingly narrowing this gap. Companies like Toyota and Maruti Suzuki, which are heavily invested in hybrids, have welcomed these developments. Pure-play EV makers like Tata Motors and Mahindra & Mahindra, however, see the trend as a threat to the EV momentum that India has painstakingly built over the past few years.