Govt should incentivise decarbonising tech: Nissan India

The Indian government should incentivise and promote different technologies which have lower carbon emissions via different tax slabs, says Rakesh Srivastava, managing director, Nissan Motor India Private Limited. Speaking on the sidelines of the Japanese carmaker’s unveil of three global products—which are chosen by Nissan to evaluate feasibility in India—Srivastava says that multiple technologies, including strong hybrids, will play a role in decreasing carbon emissions in India, and the government should recognise and promote these technologies with incentives.

Currently, only battery electric vehicles (BEVs) in India enjoy lower tax slabs (5%) by the government to promote BEV adoption in India, and subsidies from FAME. State governments additionally have their policies, through which they grant additional subsidies. Recently, the government of Uttar Pradesh has introduced an EV policy that grants exemption to consumers from paying road tax and registration fee for five years on EVs manufactured in the state from the implementation of the policy. Also, there will be a 100% rebate in road tax and registration fee for three years from implementation. Furthermore, the government will also give a subsidy of 15% (which cannot amount to more than ₹1 lakh) of the factory cost of the vehicle.

Hybrid vehicles, on the other hand, do not enjoy the same tax benefits as electric vehicles do. In fact, the government taxes hybrid vehicles at par with vehicles which have an internal combustion engine (ICE). Mild hybrids are levied a 29% tax, whereas strong hybrids are levied a 43% tax. Developed economies like Europe, for instance, have tax slabs based on CO2 emissions of a car. However, Joni Paiva, divisional vice president for Africa, Middle East, India and Oceania, Nissan Motor, feels that despite the challenges presented by the Indian car market, car buyers may not be deterred by a higher tax slab if the proposition is compelling enough.

On being asked why the company is not looking at BEVs in India, Paiva says that there are three figurative “stars” that need to be aligned for BEVs to thrive. According to him, they include lower costs; higher acceptance rate among consumers, and political will—which includes supporting infrastructure, incentives, and subsidies, and in India, costs and infrastructure are yet to be favourable. This sentiment was echoed by Srivastava, who believes that the time will be ripe to bring BEVs—Nissan's Leaf, for instance—in India when it will be backed by the presence of supporting infrastructure, including charging stations.

Srivastava adds that the company will leverage its global portfolio—which primarily consists of SUVs—to increase its market share in India. “We have pioneered SUVs, so why not,” he adds. Nissan India has unveiled three SUVs which are currently being evaluated for feasibility in India, presumably to reinvigorate its commitment to the Indian passenger vehicle market. Frank Torres, President, Nissan Motor India, says that the X-Trail will be the first to ply on Indian roads. Although Nissan India has eschewed giving a timeline of the X-Trail launch, it is understood that the launch of the X-Trail will happen sometime in the first quarter of next year. “The Indian market has boundless potential, and it is critical that we introduce the best vehicle line-up to align with what modern Indian consumers want and need. We plan to strengthen our focus and leverage our expertise on high-quality SUVs,” he explains. Nissan India’s market share at the end of FY’22 stood at 1.24%.