The current implied domestic valuations of pharma companies do not adequately factor in threats from any acceleration in the pace of adoption of unbranded and trade generics in India, as per a report by Kotak Institutional Equities.
Toyota Motor has urged the Indian government to cut taxes on hybrid vehicles by as much as one-fifth, arguing these are far less polluting than petrol cars but do not get commensurate policy treatment.
In its letter to the government, Toyota’s India Country Head Vikram Gulati has stated that the 5 per cent differential favouring hybrids over petrol cars is insufficient given the reduced emissions and better fuel consumption hybrids offer.
It is to be noted that India taxes EVs at just 5 per cent, while the levy on hybrids is as high as 43 per cent. Taxes on petrol cars are at 48 per cent.
The Central government has focussed on pushing sales of EVs offering companies millions of dollars in incentives to build EVs and batteries.
The tax differential over petrol cars should be as much as 11 per cent points for hybrids and 14 points for flex-hybrids, the letter stated.
“We would kindly request for a proportionate policy support,” Gulati wrote.
According to a recent report by GameChanger Law Advisors and Speciale Invest, the Indian EV battery market will grow from $16.77 billion in 2023 to $27.70 billion by 2028, with a CAGR of 10.56 per cent during the period spanning 2023 to 2028.
The Indian EV market was valued at $3.21 billion in 2022 and is expected to grow to $113.99 billion by 2029 at a compound annual growth rate of 66.52 per cent.
It is worth highlighting that Toyota has faced criticism from investors and climate groups for still supporting hybrids, which it says make better sense for markets where the infrastructure is not ready for EVs.
In the Indian market, Tata Motors and Mahindra & Mahindra are backing EVs, while Toyota and Honda Motor want support for hybrids.