Incentives for EV, Hybrid Auto Makers In Karnataka; Know Top Gainer Auto Stocks

The Karnataka state government plans to cut levies and offer financial incentives to auto companies in the clean energy sector, including a steep tax cut for hybrid cars. This move could make Karnataka the second state in India after Uttar Pradesh to provide tax breaks for hybrid cars.

A draft of a state government document sent to Toyota, The state aims to drop road tax and registration charges for hybrid cars costing less than USD 30,000 to 13 per cent down from the current 18 per cent, according to a Reuters report. State road and registration taxes are charged on top of GST which is 5 per cent for EVs and up to 43 per cent for hybrids.

The support to the clean energy sector will include vehicles in the EV category, certain hybrids, and hydrogen-based vehicles. Meanwhile, reportedly Tata Motors and Mahindra & Mahindra, want the state's incentives to only focus on EVs as they feel incentives for hybrids would hurt India's goals for EV adoption. In FY 2023-24, India's automobile sales totalled 4.2 million units, with sales of hybrid and electric vehicles (EVs) only amounting to less than 1 lakh units. India has set an ambitious target to increase the proportion of fully electric vehicles to 30 per cent of new car sales by the year 2030.

Major Gainers

Nifty Auto was the biggest sectoral gainer today up 2.28 per cent.

Maruti Suzuki, India's largest carmaker, surged Rs 579 up 4.53 per cent as it has announced plans to launch its first electric vehicle (EV) within the ongoing financial year. The company also aims to introduce strong hybrids, hydrogen, and bio-fuel models. Tata Motors also saw a huge surge of 2.77 per cent, gaining Rs 26 during the day.

Additionally, Mahindra, the third-largest EV manufacturer in India, surged by Rs 78, a 2.52 per cent increase. Furthermore, Hero Motocorp, which owns Hero Electric, a leader in the two-wheeler EV market dipped Rs 48.60 (0.8 per cent). Karnataka plans to provide incentives of up to 25 per cent on capital investments for EV manufacturers or their components. The incentives will vary based on the size of the investment and the number of employees, as outlined in the draft.