MUMBAI, June 24, 2025: As Indian states introduce new incentives for hybrid vehicles, Tata Motors is urging policymakers to maintain a focus on the long-term goal: accelerating India’s transition to full electric mobility. Shailesh Chandra, Managing Director of Tata Passenger Vehicles, emphasised while addressing the media today that the issue isn’t with hybrids as a technology; rather, it’s the concern that subsidies for hybrids could dilute the momentum of electric vehicle (EV) adoption just as it begins to gain significant traction.
This topic has gained prominence as states like Uttar Pradesh waive registration taxes on hybrids, while Karnataka is reportedly considering similar concessions. These moves make hybrid cars more competitive at the point of sale, providing consumers with options beyond pure electric vehicles. While companies like Toyota and Maruti Suzuki—both heavily invested in hybrids—welcome this shift, Tata Motors advocates for a more focused approach to government support.
“We believe that EVs are the destination technology and should be supported to address upfront costs and ecosystem challenges,” Chandra stated. “If the government has funds to allocate, they should go towards the destination technology.”
EV-First Strategy with Tactical Flexibility on Hybrids
While Tata is committed to expanding its electric vehicle business, Chandra also indicated some flexibility in the company’s product roadmap. Hybrid powertrains could be introduced into Tata’s lineup if market conditions demand it. “We will consider using hybrid technology to deliver the value we aim to provide to our customers,” Chandra explained. “We exist in a competitive market; we don’t oppose any technology, but we are against using incentives to benefit a technology that is already viable on its own.”
Tata’s internal powertrain forecast anticipates that 30% of its mix will come from EVs, 27% from compressed natural gas (CNG), and about 6-10% from diesel, with the remainder comprising petrol engines, including hybrids. Chandra emphasised that any adoption of hybrid technology would be dependent on market segments and influenced by consumer expectations or competitive pressures. “If competitiveness in certain segments requires us to introduce hybrids, we will do so. This need may arise not only from emission considerations but also from performance factors,” he noted.
A Debate on Incentives, Not Technology
For Tata, the discussion is not about being for or against hybrids; it’s about ensuring that incentives align with India’s long-term climate and industrial goals. Currently, EVs benefit from a 5% Goods and Services Tax (GST) at the national level, while hybrids face a 43% GST. However, state-level vehicle registration taxes can alter this balance, potentially making hybrids more appealing in showrooms.
Chandra warned that public funds should be directed toward overcoming real EV adoption challenges—such as addressing upfront affordability and expanding charging infrastructure—rather than supporting hybrids, which he believes are already commercially viable without additional incentives. “If customers demand it, we will offer it,” he said, “but incentives should reflect the direction in which the country is heading.”
Keeping the EV Transition on Track
For Tata, EVs are more than just a product line; they represent a destination—technologically, environmentally, and economically. With battery costs decreasing and supply chains strengthening, the company believes this is the time to focus on electric mobility rather than diverting attention to hybrids.
“Our strategy is firmly anchored in EVs,” Chandra stated. “We will continue to build toward that future.”
As India’s auto sector evolves and state-level incentives are established, Tata’s message is clear: the country’s clean mobility journey should remain on course and not take a detour into hybrids.
