Mahindra's bestselling SUV, the Scorpio, which is set to receive a facelift soon, could lose out on mild-hybrid technology due to the higher taxation on hybrid vehicles under the recently implemented Goods and Service Tax (GST).
The company's managing director, Pawan Goenka, today said the higher tax rate has put a few automakers future hybrid vehicle strategy in a flux and such vehicles may lose their sheen.
"We will soon be coming out with a non-hybrid version of the Scorpio... Demand for hybrid vehicles will have to be reassessed. Hybrids may even get phased out," said Goenka in a conference call with reporters. However, the development of hybrid technology will continue at Mahindra primarily for exports or in case there is a rethink.
"We have individually approached the government to reconsider the tax on hybrids, but it certainly seems that the decision is firm and final. I am not expecting any rethink [on the higher tax rate for hybrids] in the short term," Goenka added.
The Scorpio facelift, which is confirmed for launch this year, is likely to get an updated front styling, and power from its 2.2-litre mHawk diesel is also expected to go up by 20hp to 140hp.
Mahindra had introduced a mild-hybrid system, called ‘Intelli-Hybrid’, on the Scorpio a year ago. The system provides electrical assistance while accelerating, gives enhanced fuel economy and has other functions such as brake-energy regeneration and start-stop technology.
Surprisingly, hybrid vehicles have been kept in the highest rate bracket of 28 percent and an additional 15 percent cess, taking the total to 43 percent under GST, thus attracting the same amount of tax as a luxury car. Electric vehicles, on the other hand, have been taxed at a lower rate of 12 percent, in line with the government's push for large-scale adoption of EVs.