- 15 Jul 2024
- ICICI Securities
UP GOVERNMENT PUTS EMBARGO ON SUPPORT TO HYBRIDS
News: As per media sources, the state government of UP has put on hold the support (waiver of road tax) provided to sell Hybrid cars in the state (announced last week). The state government wants to align its policy with the contours of FAME-2 Scheme as well put a cap on vehicle prices to be eligible for this scheme.
Views: This we believe will limit the optimistic sentiment supporting the hybrid cars domestically. FAME-2 subsidy support was for fleet operators only in the PV space and not personal mobility. Henceforth if state government aligns in this direction, we see limited scope of buying hybrids from the fleet operators. Also, capping ₹ 20 lakh as the vehicle price for subsidy support will potentially weed out other models with Maruti’s Grand Vitara being the only model meeting the norm. We have firmly believed; it makes less economic sense of Hybrids. This news is negative for players such as Maruti Suzuki.
Impact: Negative