New Delhi, July 1 -- The Delhi government's decision to exclude hybrid vehicles from tax benefits in its electric vehicle (EV) policy is part of a growing national trend. Over the past year, hybrid cars have steadily lost fiscal support across India, with states from Uttar Pradesh to Rajasthan rolling back incentives to prioritize full EVs.

This policy shift follows a fierce industry debate that pitted homegrown carmakers Tata Motors and Mahindra & Mahindra against Japanese giants Maruti Suzuki and Toyota over whether hybrid technology deserves government backing.

Mint explains why hybrids are rapidly falling out of favour with policymakers.

Delhi became the latest key market to drop the idea of incentivising hybrid vehicles by waiving...