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Plug-in Hybrids Can Be India’s Best Foot Forward Towards Electrification

Modified On Aug 16, 2017 12:31 PM By Jagdev Kalsi

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Plug-in hybrid vehicles are closer cousins of electric vehicles than petrol/diesel hybrid cars

You’ve surely heard about the Volvo XC90 Excellence plug-in hybrid, haven’t you? It is powered by a 2.0-litre petrol engine and an electric motor. This Volvo plug-in hybrid can be driven for over 20km without consuming a drop of fuel. The batteries are rechargeable, and when they go dry, the SUV runs on petrol. It costs Rs 1.275 cr in India. The Volvo XC90 is also available with a diesel engine, and that costs Rs 95 lakh. If the plug-in hybrid version was taxed at 10 per cent instead of 43 per cent (as both diesel and hybrid in the existing case), the price difference between the diesel and the hybrid XC90 would come down to around Rs 3 lakh, the hybrid still being the more expensive of the duo. The hybrid XC90’s sales are about 5 per cent of the total sales of the XC90 model in India, and the biggest deterrent has to be the over-Rs 30 lakh price difference.

Plug-in hybrid vehicles offer the best of both electric and conventionally powered vehicles. They can be driven on electricity when covering short distances, and you don’t need to worry about the range as well because there’s always a petrol/diesel engine at disposal.

The GST Council recently came up with the novel idea of taxing hybrid vehicles at par with their fossil fuel-powered counterparts (read the full report here). Having been slammed for doing so, their proposed way out of this situation is not lowering the tax rate on hybrids but increasing the levy on petrol-diesel vehicles instead (read in detail about the new suggestions from GST Council here). The sad part of the story is the absurd reason for not incentivising hybrid cars – ‘hybrids save only small part of fuel’.

“Government is not much interested in promoting Hybrid cars as they save only small part of fuel” - Mr Piyush Goyal, Minister of State for Power, Coal, New and Renewable Energy and Mines

Now that GST for India is not revolving around the ‘One Nation, One Tax’ formula, should the government consider employing someone in the know to segregate hybrid cars and come up with a lower tax rate for plug-ins?

Passed as diesel hybrid - Maruti Suzuki Ciaz SHVS

Hybrid vehicles can be segmented into plug-in, petrol and diesel hybrids. Since plug-in hybrid vehicles are more closely related to electrics (because after externally charging their batteries, these vehicles can run on pure electric mode), they can fall into the 18 per cent category, which leaves the government with room to keep the electric vehicles at 12 per cent.

Petrol hybrid - Toyota Camry Hybrid

Petrol and diesel hybrid vehicles can have the base tax rate at 18 per cent being hybrids. However, to make plug-ins more attractive, the government can continue levy on these vehicles based on the segments they belong to, like their petrol/diesel counterparts. This way, both the manufacturer and the buyer get some incentive for manufacturing and driving a vehicle that is better for the environment than its non-hybrid avatar.  

Post GST Tax Rates

Base

Cess

Net

Small cars

Petrol

28.00%

1.00%

29.00%

Diesel

28.00%

3.00%

31.00%

Mid-size cars

28.00%

15.00%

43.00%

Luxury cars

28.00%

15.00%

43.00%

SUVs

28.00%

15.00%

43.00%

Hybrids

28.00%

15.00%

43.00%

Electric

12%

0.00%

12%

We wish the GST rates were..

Base

Cess

Net

Small cars

Petrol / Petrol hybrid

28.00% / 18.00%

1.00%

29.00% / 19.00%

Diesel / Diesel hybrid

28.00% / 18.00%

3.00%

31.00% / 21%

Mid-size cars / Mid-size hybrid cars

28.00% / 18.00%

15.00%

43.00% / 33.00%

Luxury cars / Luxury hybrid cars

28.00% / 18.00%

15.00%

43.00% / 33.00%

SUVs / SUV hybrids

28.00% / 18.00%

15.00%

43.00% / 33.00%

Electric

12%

0.00%

12%

Plug-in hybrid

18%

0.00%

18%

While electric cars are the best solution to the pollution woes, these cars are still not very practical. Apart from the lack of charging infrastructure, we’re yet to deal with the problems of low range and long charging times. Compared to a petrol/diesel car that can do at least about 400-500km on a single tankful, electric vehicles can do about 200kms. And the time to replenish the batteries to the fullest takes about 1/3rd of a day!

Check out how much time will it take to charge a Mahindra e20 Plus at a commercial charging station here.

Assuming we’re steadfast on the way to an all-electric motor vehicle market by 2030, plug-in hybrid vehicles can be the best judge of our upcoming EV charging support system as they would also require setting up charging infrastructure and that can act as the beta test for when the country goes fully electric.

Top authorities in India have been taking measures to curb pollution in our cities. Non-promotion of plug-in hybrid vehicles till we become an all-electric market (which is still far away) appears to be a contradiction then. Car sales won’t stop in India till 2030. So, any plug-in hybrid or hybrid car that we sell till then only helps the cause.

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2 comments
1
N
narayan subramanian
Aug 19, 2017 2:15:34 PM

"While electric cars are the best solution to the pollution woes ..." ... Who said so?? Electric cars only transfer the pollution from the vehicle exhaust to the power station where power is being generated. After all SOMEONE has to generate that power!! Unless mass power generation ITSELF is via green means, electric vehicles are NOT a solution to pollution woes. They're merely transferring the pollution from one place to another! Hybrids are better in that regard!

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2
N
narayan subramanian
Aug 19, 2017 2:19:41 PM

Hydrogen as a fuel is also a good option. Though the combustion of hydrogen itself is clean, there's some pollution involved in production of hydrogen, but still MUCH better then using conventional petrol / diesel ... Unfortunately though 'electric vehicles' have now become a 'trend' and DON'T solve the problem they're intended to solve!! Even without thinking, suddenly everyone seems to think electric vehicles will solve all problems! Hopefully someone amongst the decision makers is separating fact from fiction!!

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    2
    A
    alok tiwari
    Aug 24, 2017 2:20:19 PM

    Even if power is produced through conventional means, kilometre for kilometre electric cars have 25-30% less carbon footprint than fossil fuel powered ones. However, with share of renewables (solar, wind, and hydel) continuously increasing in the power mix of the country, they will get better and better in preventing pollution.

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      N
      narayan subramanian
      Aug 24, 2017 5:36:28 PM

      Yes, I agree that the share of renewables is fairly healthy (30% or so), but infrastructure changes will need to be massive to have electric charging stations all over the country. We are nowhere close to having that kind of electricity availability. I am not objecting to electric cars, but at least until we get there, can the government not incentivise hybrids (proper hybrids and not pseudo hybrids) and hydrogen powered vehicles for a progressively consistent policy?

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        Y
        yogendra vednant
        Aug 19, 2017 10:11:12 AM

        GST is concists of BJP & saffron dispensation. BJP plays around with GST the way they like. GST has no council but few Saffron honchos, who singlehandedly run by few people in BJP. GST became mockery only.

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