Uttar Pradesh government announces full waiver of registration fee on hybrid cars. Can customers save ₹3.5 lakh?

The Uttar Pradesh (UP) government has taken a significant step to encourage the adoption of environment-friendly vehicles by announcing a complete waiver of registration tax on strong hybrid cars. This initiative is expected to benefit companies like Maruti Suzuki India (MSIL), Honda Cars India (HCIL), and Toyota Kirloskar Motor (TKM), with customers potentially saving up to ₹3.50 lakh, as per a report by The Hindu Businessline.

The waiver applies to popular models such as Maruti Suzuki’s Grand Vitara and Invicto, Toyota's Hyryder and Innova Hycross, and Honda’s City, all hybrid vehicles, per the report.

According to sources familiar with the matter, the UP government issued a circulation on July 5 implementing the policy, which provides a “100 per cent waiver on registration fee of strong hybrid electric vehicles and plug-in hybrid electric vehicles” effective immediately, as quoted by The Hindu Businessline.

Previously, the UP government levied an eight per cent road tax on vehicles priced below ₹10 lakh and ten per cent on those costing more than ₹10 lakh (on ex-showroom), as per the report.

The Federation of Automobile Dealers Associations (FADA) reported that UP is among the largest markets for passenger vehicles in India. The state saw retail sales of 2,36,097 units in the first half (H1) of this year, marking a 13.46 per cent increase compared to 2,08,092 units in January-June 2023.

As per figures of the second quarter alone, Uttar Pradesh recorded sales of 1,09,712 units, FADA reported.  This is a growth of 10.26 per cent from 99,501 units in the same period last year, according to FADA.

This latest announcement follows an earlier policy this year, when the state implemented a zero registration cost for electric vehicles (EVs).

Hyundai's hybrid plans

Earlier this year, Hyundai Motor Group said it plans to launch its first hybrid cars in India as early as 2026, three sources said, as quoted by Business Today as the South Korean auto group shifts strategy to look beyond electric vehicles and boosts its presence in a key market.

The group, housing Hyundai Motor and Kia Corp is evaluating a hybrid sport-utility vehicle of a size similar to its top-selling, mid-sized Creta SUV in India, said two of the sources, who have direct knowledge of the plans, as quoted by Business Today.

Both Hyundai, which is India's second-largest carmaker, and Kia are targeting the launch of hybrid SUVs in 2026 or 2027, the aforementioned sources said, adding that their EV plans for India were also on track.

Hyundai Motor Group told Reuters it was "committed to a future of electrified mobility and will optimize product strategies for each market".

The pivot to hybrids - which use a gasoline powertrain and electric motor - comes as Hyundai sees a surge in sales of the technology in India, prompting it to shift away from an initial strategy that focused only on battery-driven electric vehicles.