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Andhra Pradesh decides against incentives for hybrid vehicles in new EV policy
Summary
- The policy, valid until 2029, is part of Andhra Pradesh’s goal to achieve carbon-neutrality in the transport sector by 2047. While Uttar Pradesh has included hybrids in its incentive policy, Andhra has decided to focus on battery electric vehicles as the backbone of its clean-transport strategy.
New Delhi: The Andhra Pradesh government has decided not to extend road tax waivers and cash incentives for buyers of hybrid vehicles, in its new sustainable electric mobility policy document seen by Mint.
The policy, effective 11 December, extends benefits only to electric two-, three-, and four-wheelers, goods carriers, and e-buses, diverging from other states like Uttar Pradesh that have incentivized hybrids to promote cleaner mobility.
The policy, valid until 2029, is part of Andhra Pradesh’s goal to achieve carbon-neutrality in the transport sector by 2047. While Uttar Pradesh has included hybrids in its incentive programmes, Andhra Pradesh has decided to focus on battery electric vehicles (BEVs) as the backbone of its clean-transport strategy.
Sales of electric passenger vehicles in India fell 19% in the first half of the ongoing fiscal year.
The numbers game
Andhra Pradesh has 1.3 lakh registered BEVs, just a fraction of its 1.78 crore vehicle population, which includes a negligible 817 hybrids.
Hybrid vehicles typically use internal combustion engine as well as electric motors.
In July, Uttar Pradesh extended a 100% road tax waiver to both EVs and hybrids for three years, and introduced cash incentives of up to ₹1 lakh. The road tax waiver alone represents significant savings: for EVs priced above ₹10 lakh, the waiver could offset the 8% road tax, rising to 9% for vehicles priced above ₹20 lakh.
Also read: Why the hype for hybrid cars will not last
Tata Motors, India’s largest EV manufacturer, had lobbied the Uttar Pradesh government to impose price caps on vehicles eligible for these incentives. The company argues that subsidies for higher-priced vehicles disproportionately benefit premium players, limiting the broader impact on mass-market adoption.
Why Andhra Pradesh excluded hybrids
Andhra Pradesh’s decision stems from its vision to accelerate BEV adoption and establish itself as a global hub for EV manufacturing. The policy targets the registration of 2 lakh electric two-wheelers and 20,000 electric four-wheelers by 2029, along with a fully electrified bus fleet for the Andhra Pradesh State Road Transport Corporation (APSRTC).
Andhra Pradesh’s policy includes robust support for EV manufacturers and infrastructure developers. Incentives for MSMEs in the sector include investment subsidies of up to ₹7 crore, reimbursements on electricity duties and power tariffs, and a 25% capital subsidy for public charging station operators.
Also read: Hybrid cars must haul the cess load for longer
The state currently operates 601 public charging stations and aims to increase this density significantly, with one station every 30 km on major routes and in 3x3 km grids in designated “e-mobility cities."
Dealers of Toyota Kirloskar Motor, Honda and Maruti Suzuki continue to advertise—and offer—a substantial road tax waiver benefit to potential buyers of hybrids in Uttar Pradesh.
The Uttar Pradesh government in July had sent a clear signal about its favourable stance on hybrid vehicles: A full road tax waiver on the purchase of a hybrid car in the state, as stipulated by the government's policy on green mobility, will stay, despite intense lobbying by electric vehicle (EV) makers, particularly by Tata Motors, which is a dominant player in India's passenger EV market, as well as by Hyundai Motor India and Mahindra & Mahindra.
EV makers wanted the state government to prioritize and extend such sops exclusively to electric vehicles.
