The world's largest carmaker plans to expand production capacity to meet a surge in Indian demand for hybrids, but Prime Minister Narendra Modi's government has focussed on pushing sales of electric vehicles , offering companies millions of dollars in incentives to build EVs and batteries.
The tax differential over petrol cars should be as much as 11 per centage points for hybrids and 14 points for flex-hybrids, says the letter from Toyota's India country head, Vikram Gulati. Toyota, which popularised hybrid technology with the Prius, has faced criticism from investors and climate groups for still supporting hybrids, which it says make better sense for markets where the infrastructure is not ready for EVs.