Tata Motors to manufacture hybrid cars in India? Top official drops a hint

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India's largest electric vehicle manufacturer Tata Motors could foray into the hybrid vehicle segment soon. The carmaker said that it will be open to the idea to diversify its fleet, but it will happen on one condition. Hybrid vehicles in India offer choice to customers looking for vehicles powered by alternative fuel. CNG and electric vehicles are the two more popular choices so far as the hybrid vehicles segment does not offer too many options and attract high amount of taxes.

While announcing the quarterly results of Tata Motors on Thursday (August 1), one of the top officials said that Tata Motors is not ruling out its chances to work on hybrid vehicles. PB Balaji, Chief Financial Officer at Tata Motors, said the decision will depend on factors like demand. High prices of conventional fuel like petrol and diesel have encouraged Indian car buyers to switch to CNG, electric or hybrid vehicles to keep running costs as low as possible while enjoying other benefits.

Will Tata Motors build hybrid cars?

For Tata Motors, it will all boil down to what kind of demand the hybrid vehicles segment generates in coming days. "If the consumer wants hybrids, if that is something that is going to be a material part of the portfolio, then we will look at it at that point in time," said Balaji during a press briefing on Thursday. He also said that the carmaker will not support incentives backed by the Centre. In fact, Tata Motors has urged the Centre not to lower Goods and Service Tax (GST) on hybrid vehicles which currently stands at 43 per cent. It wants the government to continue supporting EVs, a segment which it leads.

GST debate on hybrid cars vs electric vehicles

Tata's stand on hybrid vehicles comes at a time when the Uttar Pradesh government ruffled the industry by offering tax waiver recently. Compared to 43 per cent GST for hybrid vehicles, an EV customer in India needs to pay only five per cent GST for electric cars. "Our only point has always been hybrids is a transition technology that is old-school ... therefore there is no earthly reason for it to get any incentives from a government perspective," Balaji said.

The number of hybrid cars in India is far less than the number electric vehicles. Tata itself sells four electric cars, including Punch EV, Nexon EV, Tigor EV and Tiago EV. It is also gearing up to launch two more which include Curvv EV and Harrier EV. The number of hybrid cars available in India is less than even Tata's EV portfolio alone. These include Toyota Urban Cruiser HyRyder, Innova HyCross, Camry, Maruti Suzuki Invicto and Honda City Hybrid. The list does not include vehicles with mild-hybrid powertrain or the ones available in the luxury segment.

Lowering GST on hybrid vehicles could impact sales of EVs in India which has already seen a slowdown in the past couple of months. For the first time, even Tata Motors witnessed drop in sales of its EVs in July. EVs made up about 12 per cent of Tata's overall car sales in the first quarter of the financial year 2024-25.