UP’s hybrid vehicle benefits may not be for all

The Uttar Pradesh state transport authority has now informed carmakers that the road tax waiver for strong-hybrid vehicles will be applicable only on vehicles that qualify for the FAME II subsidies. According to ET Auto, the transport authority had conveyed this via a letter dated July 9. Our dealer sources, however, have revealed that this has not come into effect yet, and they are awaiting clarifications from multiple stakeholders.

Under the FAME II category for four wheelers, the benefits are extended to as many as 55,000 EV and hybrid vehicles used for commercial and fleet duties, so privately registered hybrid vehicles will not qualify for the road tax waiver. Additionally, the FAME II benefits are only applicable on vehicles priced under Rs 20 lakh (ex-showroom), and if this update comes into effect, only select variants of petrol-hybrid vehicles like the Grand Vitara and Hyryder would qualify for the waiver.

This development comes after a few car brands, which focus on EVs, raised concerns on the road tax waiver for hybrid vehicles. Some of these brands have petrol hybrids and are readying EVs for a market launch. The updated policy will most likely not have a blanket exemption and offer incentives to only certain categories of strong hybrids. Final guidelines regarding incentives on hybrids and EVs will be announced soon, said sources.

The UP Industries Department had said on July 5 that it would waive road tax on hybrid and plug-in hybrid vehicles, effective July 1. At present, a 5 percent tax is levied on EVs, 43 percent on hybrids, and 48 percent on petrol cars. The policy has reduced the on-road prices of models like the Hyryder and the Hycross by up to Rs 3.11 lakh, regardless of their registration type, thus levelling the playing field between petrol and hybrid vehicles.

A few Toyota and Nexa dealers we spoke to in UP, informed us that, for now, the road tax waiver hasn't been withdrawn. However, private car buyers are being informed that they may not get these benefits at the time of registeration if the new rules come into effect. All-in-all, it’s a make hay while the sun shines situation for a hybrid vehicle buyer in UP at the moment.