Mahindra Scorpio hybrid may be discontinued; will GST kill hybrid cars?

Hybrid technology in cars is considered the bridge between forced induction engines (petrol and diesel engines) and electric powertrain, which is tipped to be the future of mobility. In many foreign markets, the hybrid cars have become the main segment while in India, it is still in the infancy stage.

However, the new tax system of the Narendra Modi government, Goods and Services Tax (GST), may play spoilsport in the growth of hybrid cars. The central government has levied the highest tax rate on hybrid vehicles in the new GST structure. Hybrid vehicles will attract total levies of a steep 43 percent under GST (28 percent tax and 15 percent cess).

The result is hybrid cars will go premium. Mahindra and Mahindra could fear that the new tax slab for hybrid cars will dent the sales of its SUV, Scorpio Intelli-Hybrid. A report in Autocar Professional claims that Mahindra may pull out the plug on Scorpio hybrid soon.

Mahindra launched Scorpio Intelli-Hybrid in September 2016 for a starting price of Rs 9.35 lakh. With GST added, the prices may go over Rs 10.5 lakh and at that price, range takers will be limited. The Intelli-Hybrid technology reduces fuel consumption by up to seven percent by assisting the engine with electric power during acceleration. It automatically switches the engine off while the vehicle is stationary (start-stop) and regenerates brake energy while applying brakes to charge the battery.

There is nothing surprising if Mahindra decides to discontinue Scorpio hybrid. In fact, many other carmakers are expected to follow the suit or they will be forced to increase the price of its hybrid cars. Maruti Suzuki has already increased prices of Ertiga and Ciaz hybrid models. Toyota and Honda sell Camry Hybrid and Accord Hybrid, respectively. Is there a future for such cars especially when the government is aggressive go all electric cars by 2030? In any case, if you still want to buy a hybrid car now, get ready to shell out more.