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

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

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The Uttar Pradesh (UP) government has announced a full waiver on registration fees for strong hybrid vehicles, aiming to promote eco-friendly cars. This initiative benefits major car manufacturers like Maruti Suzuki, Honda, and Toyota, potentially saving customers up to ₹3.50 lakh.

The Uttar Pradesh (UP) government has taken a major step to promote eco-friendly vehicles by announcing a full waiver of registration tax on strong hybrid cars. This move is expected to benefit companies like Maruti Suzuki India (MSIL), Honda Cars India (HCIL), and Toyota Kirloskar Motor (TKM), potentially saving customers up to ₹3.50 lakh, according to a report by SMT.

hybrid cars
Image Source: CarWale

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, as per the report.

Uttar Pradesh Government’s Policy Initiative

Sources familiar with the matter stated that the UP government issued a circular on July 5 implementing the policy, providing a “100 per cent waiver on registration fee for strong hybrid electric vehicles and plug-in hybrid electric vehicles,” effective immediately, as quoted by SMT.

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

The Federation of Automobile Dealers Associations (FADA) reported that UP is one of 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 percent increase compared to 2,08,092 units in January-June 2023.

Market Dynamics and Sales Trends

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

The Uttar Pradesh (UP) government has reportedly announced a complete waiver of registration tax on strong hybrid cars, potentially saving customers up to ₹3.50 lakh. This move is expected to benefit companies like Maruti Suzuki India (MSIL), Honda Cars India (HCIL), and Toyota Kirloskar Motor (TKM).

According to reports, the state has issued a directive on July 5 offering a “100 percent waiver on registration fees for strong hybrid electric vehicles and plug-in hybrid electric vehicles.”

Given UP’s eight percent road tax on vehicles under ₹10 lakh and ten percent on those above ₹10 lakh, this waiver serves as a substantial incentive. However, BT could not independently verify the reports.

UP stands as a major market for passenger vehicles, witnessing sales of 2,36,097 units in the first half of this year, a 13.46 percent rise from the same period in 2023. In Q2 alone, sales reached 1,09,712 units, marking a 10.26 percent increase year-on-year.

Ankit Raj, Chairperson of the Federation of Automobile Dealers Associations (FADA), commented, “This policy will bolster strong hybrid vehicle sales in UP, despite the current small market size. Most buyers of such vehicles are not first-time owners. Chief Minister Yogi Adityanath’s initiative is poised to support the auto sector.”

Earlier this year, the state also implemented a policy of zero registration costs for electric vehicles (EVs).

An MSIL dealer pointed out that while demand for strong hybrids in UP is presently low, the new policy could drive sales growth. Analysts predict that other states may follow UP’s lead, potentially boosting vehicle sales and increasing the market share of luxury hybrids.

Hybrid Electric Vehicles (HEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) both utilize an internal combustion engine and an electric motor. The primary distinction lies in PHEVs having a larger battery requiring external charging.

Maruti offers HEV technology in the Grand Vitara SUV and the Invicto MPV. Toyota provides similar technology in the Urban Cruiser Hyryder SUV and the Innova Hycross MPV. Honda incorporates HEV technology into the City e sedan.

With UP waiving registration fees for HEVs, buyers can save over ₹3 lakh on the Maruti Suzuki Invicto and Toyota Innova Hycross, and more than ₹2 lakh on the Maruti Suzuki Grand Vitara, Toyota Urban Cruiser Hyryder, and Honda City e:HEV.

The Maruti Suzuki Grand Vitara and Toyota Urban Cruiser Hyryder share the same hybrid powertrain: a 1.5-litre petrol engine (92PS/122Nm) paired with an electric motor (80PS/141Nm), delivering a combined output of 116PS. Transmission is handled by an e-CVT.

The Maruti Suzuki Invicto, a badge-engineered version of the Toyota Innova Hycross, features a hybrid powertrain with a 2.0-litre petrol engine and an e-CVT. This system produces a total power of 186PS, with the engine generating 152PS and 188Nm of torque, and the motor providing 113PS and 206Nm of torque.

The Honda City: HEV is powered by a 1.5-litre Atkinson cycle petrol engine (98PS and 127Nm) and two electric motors, delivering a total system output of 126PS. This sedan also uses an e-CVT for transmission duties.

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