Indians on the hybridge to electric future: Hybrid cars demand surges at a pace similar to EVs despite fewer options

Economic Times

12 hours ago

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New Delhi: Demand for strong hybrid cars is growing at a pace similar to electric vehicles (EVs) despite limited offerings, and government incentives promoting the latter, prompting carmakers to line up more hybrid models to meet increasing customer demand amid high fuel prices.
There are only about five strong hybrid models on sale in the country, compared to 15 EVs. Yet, both segments grew about 18% year-on-year in FY25, with hybrids emerging as a practical, fuel-efficient alternative while pure electric adoption slowed amid continuing infrastructure bottlenecks.
Automakers are creating more room for hybrids in their emissions compliance strategies ahead of stricter fuel-efficiency rules set to kick in from April 1, 2027. From Maruti Suzuki to Hyundai Motor India and Mahindra & Mahindra, they are gearing up to launch more than half a dozen hybrid vehicles over the next two years. 'Interestingly, automakers that previously dismissed hybrids are now actively evaluating or developing hybrid models for India,' said Gaurav Vangaal, associate director at S&P Global Mobility. 'This shift reflects evolving market dynamics and growing consumer interest, which, month after month, is increasingly steering the industry toward hybrid technology.' According to the industry, more than half of the sales of Toyota Innova Hycross and Urban Cruiser Hyryder now come from strong hybrid variants.Maruti Suzuki offers only a strong hybrid version of the Invicto MPV. At Honda, the share of strong hybrid in City sedan sales has increased to almost 15%, up from 9-10% after launch. 'With the upcoming implementation of CAFE 3 norms, we can expect a surge in launches across both hybrid and electric powertrains,' said Vangaal of S&P. The government is in the process of formulating the third edition of the Corporate Average Fuel Efficiency (CAFE 3) norms. Under CAFE, fuel consumption and emission targets apply to the overall fleet of a carmaker, including EVs and hybrids, rather than individual models. This gives manufacturers leeway to sell larger, less efficient vehicles as long as their cleaner models offset the impact on overall fleet emissions.
Fuel-wise vehicle sales data collated by industry body Society of Indian Automobile Manufacturers (SIAM) show hybrid vehicle sales rose 18% year-onyear to 105,000 units in FY25. Electric vehicle sales, too, grew at a similar pace to 118,000 units, largely driven by new, more affordable models introduced by Tata Motors, JSW MG Motor and M&M.Sales of petrol vehicles, meanwhile, dipped by 6.6% to 2,482,000 units. Industry watchers said the pace of growth in EV sales has moderated (from about 90% in FY24) despite central and state governments lining up several incentives — from reduced GST rate of 5%, waiver of registration charges and road taxes, and income tax benefits to enthuse customers to shift to EVs. They mostly blame it on the lack of adequate charging infrastructure. Thus, buyers looking to save on fuel costs are increasingly opting for strong hybrid vehicles.NEW HYBRIDSWhile Maruti Suzuki is set to take the covers off a hybrid SUV (codenamed Y17) ahead of the festive season this year, its Korean rivals Hyundai and Kia are set to drive in their first strong hybrid models next year, industry insiders said.JSW MG Motor is examining plug-in hybrid vehicles for launch in India. Industry insiders said homegrown M&M, which so far has been betting big on born EVs, too, is developing a strong hybrid vehicle for launch in 2027. 'It is heartening to note that both BEVs and strong hybrids are growing well,' said Rahul Bharti, senior executive officer at Maruti Suzuki. 'SHEVs (strong hybrids) also enhance energy efficiency and reduce CO2 significantly over pure petrol/ diesel vehicles.' Mahindra also is planning to drive in a hybrid version of XUV 3XO, a senior industry executive aware of the company's plans said.