Awaiting policy on hybrids, green tech: Maruti Chairman R C Bhargava

Maruti Suzuki India Limited (MSIL) is awaiting a government policy framework to promote all green technologies, including strong hybrids, to replace petrol and diesel vehicles and reduce carbon dioxide emissions, chairman R C Bhargava said on Sunday.

As India aims to be carbon neutral by 2070, automakers are divided over the best path ahead.

Japanese giants like Maruti Suzuki and Toyota are pushing for tax cuts on hybrids, arguing that electric vehicles (EVs) alone can't carry the emissions reduction load.

But homegrown players like Tata Motors and Mahindra & Mahindra (M&M) have opposed such tax cuts, insisting that only a full-throttle EV push can truly decarbonise India's roads.

EVs in India are charged just five per cent goods and services tax (GST) but hybrid cars owners shell out 28 per cent GST. 

The divide within the auto industry recently came to the fore after a July 5 order of the Uttar Pradesh (UP) government to waive a registration tax of up to 8-10 per cent for strong hybrid vehicles. 

In MSIL's annual report released on Sunday, Bhargava said: “Some believe that your company has been slow to manufacture electric vehicles. We decided to adopt a more diversified approach to meeting national objectives and did not want to put all our eggs in one basket. The government has also accepted that in India there is a need to use different technologies.”

“Some states like UP have already taken steps in this direction. We now await a policy framework that would lead to the promotion of all technologies that result in petrol and diesel cars being replaced by cars using other technologies,” he noted. 

MSIL currently sells two strong hybrid cars in India — Grand Vitara and Invicto. It is planning to launch its first EV in the next few months. By 2030-31, MSIL plans to launch a total of six EVs.

A major national objective for the car industry is to reduce carbon and greenhouse emission and dependence on imported fuel.

MSIL has decided that considering India's economic and social environment and the availability of resources within the country, the best strategy would be to offer customers cars with different technologies and at different price levels, Bhargava said. 

Only cost reduction and establishment of charging infrastructure will spur the acceptance of EVs.

“This has to largely come from localisation of production and better technology,” he stated.

“It is also clear that pure petrol and diesel cars are the worst in terms of carbon and greenhouse gas emission and consumption of fuel. Therefore, while electric car use increases, customers should also be encouraged to buy cars using strong hybrid technology, CNG, ethanol or biogas. Pure petrol and diesel car use should be minimised. Hybrid cars improve fuel efficiency by about 35-45 per cent and help reduce the carbon and greenhouse gas emission by 25-35 per cent,” he added.

CNG cars are not as clean as hybrids but are better than petrol or diesel cars and also do not use oil.

“India has a very large potential for developing biogas from agricultural, animal and human waste. Biogas is completely renewable, has no import content and is overall, carbon negative. Production of biogas would also lead to important benefits to the environment. For example, the burning of paddy stubble could be substantially reduced, and cleanliness levels increased,” he said. 

MSIL has started work on a trial basis to produce biogas.

“We look forward to government policies that would result in rapid development of this fuel. We are also working on modifying engines of cars and presently can use petrol blended with 20 per cent ethanol. Technology exists to enable cars to use higher amounts of ethanol,” he added.