Mumbai: Mahindra & Mahindra (M&M), one of India’s leading automakers, came out strongly in support of electric mobility, saying it was the right direction for the future of the country. The Mumbai-based auto major said that its emphasis on EVs was in sync with the nation’s long-term goals and, therefore, should be the main area of support by the government.
This comes in after the recent decision of the Uttar Pradesh government to offer full road tax waivers on the purchase of hybrid vehicles within the state. Of course, that move was intended to act as an incentive towards more environmentally friendly vehicles, but it has rung an alarm among the already huge investment which some automakers had done in electric vehicles. Companies are concerned that incentives for hybrids could undermine the greater diffusion of fully electric vehicles, considered more feasible for the longer term.
The Case for Electric Mobility
The stance taken by Mahindra & Mahindra is a growing industry consensus that electric vehicles represent the future of mobility. “It is in the interest of the nation to support electric mobility,” said its executive director and chief executive officer, Rajesh Jejurikar. Government policies, he added, must be framed in such a manner that the development of EVs should be encouraged, as well as their usage. This would, at the end of it all, result in an auto sector that is more resilient and sustainable.
The company has been of the view that a clear roadmap on EVs, backed by relevant products and policies, is necessary for the long-term growth of the country. M&M reckons that electric vehicles are not aligned with India’s environmental goals alone but also with its economic ambitions since it can help reduce dependence on fossil fuels and bring down greenhouse gas emissions.
Hybrid Vehicles: A Bone of Contention
They were supposed to be the middle ground for years, with conventional gasoline-powered vehicles at one extreme and fully electric cars at the other, powered by a combination internal combustion engine and one or more electric motors. A problem is that the tax burden on hybrids is greater than on electric vehicles, which has put manufacturers in a contentious mood.
In India at present, hybrid vehicles are subject to a total tax incidence of 43%, including the Goods and Services Tax. Fully electric vehicles attract a total tax of about 5%. This has led hybrid vehicle manufacturers to demand tax parity with electric vehicles.
Notwithstanding these demands, M&M’s leadership holds that electric vehicles are something to be focused on, as they can be a more sustainable, future-proof solution for the transportation needs of India.
How Will the Decision by the Uttar Pradesh Government Impact?
If the Uttar Pradesh government waives off the road tax for hybrid vehicles, then other states might follow suit. For the committed progressionists-cum-automakers of electric vehicle mobility in the country, this is a cause for worry since they feel that such sops could dilute the gaining momentum of electric vehicles and slow the transition to a fully electric automotive ecosystem.
This firm stand that M&M takes against such incentives substantiates the company’s commitment to electric mobility. By rooting for such policies that would help in the growth of EVs, M&M is trying to position itself at the forefront in driving the change towards a greener, more sustainable Indian auto industry.
Industry-Wide Support for Electric Vehicles Ends
Interest in electric mobility is not an isolated case with M&M. The Indian automobile industry as a whole has, over a period, been getting more and more supportive of the transformation to electric vehicles, while many companies are investing heavily in EV technology and infrastructure. This is also fueled by the national priority that the government is according to electric mobility, with several initiatives towards greater adoption of electric vehicles all across the country.
While the debate over the best approach to sustainable mobility rages on, one thing is very clear: electric vehicles would play a central role in shaping up the future of the automotive industry in India. A company like Mahindra & Mahindra that has firmly made its stand for electric mobility will be at the center of it all.
M&M’s decision to go for electric mobility instead of hybrid mobility serves as a long-term view by the company with respect to the prospects of the auto industry in India. Arguing for policies serving electric vehicles aligns M&M with the nation’s broader goals: sustainable development with economic growth. Therefore, with the country driving toward more sustainable development, active participation from key players in industry—like M&M—will have to be an ongoing process if electric mobility in India has to be successful.
Source: Mahindra & Mahindra, various industry reports