Will Tata Motors manufacture hybrid cars in India? Top official clears stand

Tata Motors leads the electric car market in India. And by a mile and a half. But while it also offers models with petrol, petrol/CNG and diesel engine options, hybrid is a path it has steered clear of thus far. But in the world of ever-evolving market dynamics, ‘never say never’ is the likely mantra for many.

While announcing the quarterly results of Tata Motors on Thursday (August 1), one of the top company officials hinted that Tata Motors isn't outright against working on hybrid vehicles but that it remains a ‘transition technology’ and that hybrid technology 'costs a lot of money’ to develop. PB Balaji, Chief Financial Officer at Tata Motors, said the eventual decision will depend on factors like demand.

Will Tata Motors build hybrid cars?

For Tata Motors, it will all boil down to what kind of demand the hybrid vehicles segment generates in coming days. "If the consumer wants hybrids, if that is something that is going to be a material part of the portfolio, then we will look at it at that point in time," said Balaji during a press briefing on Thursday. He, however, also said that the carmaker will not support incentives backed by the Centre. In fact, Tata Motors has urged the Centre not to lower Goods and Service Tax (GST) on hybrid vehicles which currently stands at 43 per cent. It wants the government to continue supporting EVs, a segment which it leads. “Our only point has always been hybrids is a transition technology that is old-school and it is not something where the future is. Hybrid manufacturing costs tons of money and therefore, there is no earthly reason for it to get any incentives from a government perspective. That is what we have been vociferous about."

GST debate on hybrid cars vs electric vehicles

The focus on hybrids gained traction when the Uttar Pradesh government recently ruffled the industry by offering tax waiver recently. Compared to 43 per cent GST for hybrid vehicles, an EV customer in India needs to pay only five per cent GST for electric cars.

The number of hybrid cars in India is far less than the number electric vehicles. Tata itself sells four electric cars, including Punch EV, Nexon EV, Tigor EV and Tiago EV. It is also gearing up to launch two more which include Curvv EV and Harrier EV. The number of hybrid cars available in India is less than even Tata's EV portfolio alone. These include Toyota Urban Cruiser HyRyder, Innova HyCross, Camry, Maruti Suzuki Invicto and Honda City Hybrid. The list does not include vehicles with mild-hybrid powertrain or the ones available in the luxury segment.

Lowering GST on hybrid vehicles could impact sales of EVs in India which has already seen a slowdown in the past couple of months. For the first time, even Tata Motors witnessed drop in sales of its EVs in July. EVs made up about 12 per cent of Tata's overall car sales in the first quarter of the financial year 2024-25.

Check out Upcoming Cars in India 2026, Best SUVs in India.