Tata Motors may look at Hybrids if Demand is Strong, says CFO

Tata Motors, said it would be open to making hybrid cars if demand for the technology surged, but does not support government incentives for it.

The ‘Nexon’ SUV-maker, which has seen money from TPG for its electrification push, has asked  Indian government officials to maintain their support for EVs and not lower taxes on hybrid vehicles, despite demands by competing carmakers Toyota Motor and Maruti Suzuki.

“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,” Chief Financial Officer P. B. Balaji said in a post-earnings call.

India taxes electric vehicles at just 5% while hybrids are taxed at 43%, just below the 48% tax on petrol and diesel cars.

“Our only point has always been hybrids is a transition technology that is old-school … therefore there is no earthly reason for it to get any incentives from a government perspective,” Balaji said.

In the very first quarter EVs made up about 12% of Tata Motors’ total passenger vehicle sales.

The comments came after Tata Motors’ June-quarter consolidated net profit rose 73.8% year-on-year to 55.66 billion rupees ($665 million) and beat analysts’ average estimate of 54.25 billion rupees, per LSEG data.

The luxury Jaguar Land Rover is Tata Motors’ bellwether, accounting for about two-thirds of the Tata Group Company’s income. Among the British division’s cars, its Range Rover, Range Rover Sport and Defender models are its most margin-boosting as they are more expensive.

The company also added it is retaining its full-year forecast of 8.5% margin on earnings before interest and taxes (EBIT) for JLR. ($1 = 83.7170 Indian rupees)

On a quarterly update the contribution of these models to JLR’s total wholesale volumes raised to 68% in the June quarter.

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