The Uttar Pradesh government, under the leadership of Yogi Adityanath, has decided to continue its policy of offering road tax waivers for strong hybrid vehicles such as the Toyota Innova HyCross, Toyota HyRyder, Maruti Grand Vitara, and Honda City. This decision comes despite a recent meeting where major automakers like Hyundai, Tata Motors, Bajaj Auto, Mahindra, and Kia Motors requested the state to reconsider the tax relief for hybrids.
UP Government Confirms Road Tax Waiver for Hybrid Vehicles
Representatives from Maruti Suzuki and Honda Cars India also voiced their support for extending the road tax waiver during talks with the state’s chief secretary. As a result, the waiver will stay in effect until October 2025, when the policy will be reviewed.
State officials have noted that the tax relief for hybrids has not negatively impacted electric vehicle (EV) sales in Uttar Pradesh, which continue to grow steadily. They are closely monitoring both hybrid and EV sales and have indicated that the policy might be reconsidered if EV sales drop significantly.
Currently, the road tax waiver has resulted in considerable price reductions for hybrid vehicles in Uttar Pradesh. For instance, the Toyota Innova HyCross and Maruti Invicto are now cheaper by about ₹3.3 lakh, while the Maruti Grand Vitara, Toyota HyRyder, and Honda City hybrids have seen a ₹2 lakh price drop. The Toyota Camry Hybrid also benefits from the waiver, with its price reduced by ₹4.4 lakh in the state.
A Unique Strategy to Promote Hybrids
The UP government’s move aligns with Union Transport Minister Nitin Gadkari’s push for a GST reduction on strong hybrid vehicles, although the central government has not yet implemented such a cut. Rather than seeking a GST reduction, which would require broad approval from the GST Council, the UP government opted to reduce road tax—a decision under its direct control. This approach allows the state to bypass national regulatory processes while still promoting hybrid vehicles.
Industry Reactions Are Mixed
The decision has created a divide within the Indian automotive industry. Automakers like Maruti Suzuki, Toyota, and Honda, which produce hybrid vehicles, support the tax waiver. However, companies focused on electric vehicles, including Tata Motors, Mahindra, Hyundai, and Kia Motors, are concerned that the waiver might decrease the appeal of EVs and lead buyers to choose hybrids instead.
So far, these concerns have not been realized, as EV sales in Uttar Pradesh have remained stable despite the hybrid tax break. However, it may take more time to fully understand the long-term effects of the waiver on the EV market. For now, hybrids have gained a competitive edge in Uttar Pradesh, sparking curiosity about whether other Indian states might adopt similar policies in the future.