Hyundai has aligned itself with Indian car manufacturers Tata Motors and Mahindra & Mahindra in opposing any tax breaks for hybrid vehicles, citing concerns that such measures could disrupt the market for petrol and diesel cars.

Japanese carmakers like Maruti Suzuki, Toyota, and Honda have been advocating for lower taxes on strong hybrids, arguing that the technology reduces emissions and improves fuel efficiency.

In regulatory filings with Sebi before its initial public offering, Hyundai stated, "...with the objective to address climate issues, the government of India proposes to reduce GST on hybrid passenger vehicles to 5% and 12% on flex engines, while the GST on diesel and petrol vehicles is proposed to remain at 28%... In the event such amendment becomes effective, it could have an adverse impact on the sales volumes of our diesel and petrol vehicles which could affect our margins, business, and results of operations."

Both Tata Motors and Mahindra have consistently opposed any special benefits for hybrids, arguing that only electric vehicles should benefit from the 5% GST rate. They contend that only "zero emission vehicles" should receive incentives, rather than those offering mere "fuel efficiency improvement technologies."

Hyundai, Tata Motors, and Mahindra share the fear that a tax concession for hybrids could negatively impact their sales and profitability in the petrol and diesel segments.

The debate underscores the tension between promoting advanced fuel efficiency technologies and fully electric vehicles in India's evolving auto industry landscape.

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