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Toyota Advocates for Hybrid Adoption to Boost Demand for Electric Powertrains in India

Toyota Kirloskar Motor, the Indian subsidiary of Toyota Motor Corp, advocates for boosting demand for electric powertrains in India by promoting the adoption of hybrid vehicles alongside electric vehicles (EVs).

The automaker believes that by fostering demand for both hybrid EVs (HEVs) and battery EVs (BEVs) India can achieve the scale to develop a competitive local production of electrified technologies, a top company official told Mint on Friday.

Japanese automakers led by Toyota and Suzuki Motor Company have long supported a diversified approach to transitioning to clean mobility globally, as opposed to focusing on pure-play BEVs.

In India, self-charging hybrids or plug-in hybrids don't receive the tax benefit in the form of a lower goods and service tax (GST) that EVs do. The Toyota-Suzuki alliance has a near monopoly in this technology in India, and globally.

South Korean and European OEMs are also keen to bring hybrid vehicles to India but are apprehensive about competition challenges from the cost-efficient structures of the Japanese brands.

“If there aren't enough electric vehicles being sold in a market, then it's a chicken and egg problem. How does a manufacturer of EV parts, let's say e-motors, invest in India?" said Vikram Gulati, country head, Toyota Kirloskar Motor.

“So either you put in some government subvention, which is already coming in through the PLI scheme, or you also on top of it add the fact that you can supply the motors not only for electric vehicles but also for hybrids because motors are common," Gulati said.

The company's e-drive plant in India --Toyota Kirloskar Auto Parts-- consists of key components of an electric powertrain which has a motor, generator, electric transmission, etc. that can be fitted into a hydrogen vehicle, EVs and self-charging hybrids. “That demand aggregated will be much bigger than coming from any one technology," he added.

Currently, nearly 70% of the total production of 1,35,000 of e-drives (transaxles for electrified vehicles) from Toyota Kirloskar Auto Part is exported to Japan annually.

Gulati cited China's success in scaling electrified automotive technologies by making them affordable in the mass market, a strategy he believes should be applied to India's sub- ₹10 lakh vehicle segment.

“We are happy that hybrids have been taking off in the segments that they have been introduced in, in India. But keep in mind, these are not really the mass segments. Even EVs are barely touching the mass segments," Gulati said.

As of now, the combined share of hybrid and electric vehicles in the market is minuscule, he said. "EVs are at around 2.1-2.2% of the passenger vehicle market, while hybrids are at 1.5 or 1.8%, and together, it is hardly 3% or 4% at best. 96% of the PVs on road today continue to be gasoline, or diesel, which is not a desirable thing from any perspective."

Gulati also emphasized the need for policy support for greener technologies beyond BEVs. Electrified vehicles include BEVs, strong hybrids, plug-in hybrids and hydrogen and flex-fuel run vehicles.

The production of Toyota's flagship internal combustion engine (IC-engine) vehicles like Fortuner and Innova in India, is close to 88-90%, but for hybrids, localization drops to 78-80% because of the lack of availability of various components, including rare earth magnets, e-steel and special grades of copper and battery cells.

While TKM has so far invested ₹4,100 crore in setting up the e-drive facility in India and expanding its Karnataka factory, the Japanese automaker is looking for deeper localization of its EV ecosystem in India to reduce the costs of its eco-friendly offerings in the market.

Meanwhile, Atul Sood, vice president, sales and strategic marketing at Toyota Kirloskar Motor expressed confidence in achieving record-breaking sales by the end of the calendar year 2023.

“In anticipation of the growing market needs we further strengthened our portfolio to meet varied mobility needs of our customers. Our popular models, including the Hilux, Innova Hycross, Urban Cruiser Hyryder, the New Innova Crysta and the Glanza remain instrumental in driving our growth," he said.

Recent introductions such as the Vellfire and Toyota Rumion are expected to play a significant role in helping the company close the year on a high note," Sood added.


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