NEW DELHI: The popularity of hybrid vehicles in the domestic car market has seen a sharp surge over the past one year or so and a large section of consumers who were fence-sitting to buy an electric vehicle (EV) are now opting for a hybrid model.
“For long time, I was confused between Nexon EV and Grand Vitara SUV as my budget ranged between Rs 18-23 lakh. After much thought, I decided to go for Grand Vitara strong hybrid model. It has more space, strong road presence and eliminates range anxiety -related concerns,” said Aman Sharma, a Bengaluru-based IT sector employee.
Like Sharma, range anxiety and the high upfront cost of e-cars remain a deterrent for many to shift from internal combustion engine (ICE) to battery-powered vehicles. The surge in demand for hybrids after back-to-back launches by Toyota and Maruti Suzuki has given them a choice. In the past six months, passenger vehicles (PVs) with hybrid technology have outsold electric PVs. Hybrid vehicles sales stood at 52,500 units between October 2023 and April 2024 as against EV sales of 48,000 units during the same period.
For FY24, the gap between the two was 10,000 units. EV sales, despite new launches, fell short of 1 lakh mark at about 99,000 units while hybrids sold at about 89,500. The market share of hybrid vehicles in the 4.23 million Indian PV market rose from 0.5% in December 2022 to 2.1% in March 2024. The increased adoption of hybrids is not only limited to India. The US and China are also seeing a growing preference for hybrids, forcing big carmakers to rethink their aggressive EV transition. As per reports, US electric carmaker Tesla missed its delivery estimates for March quarter while hybrid car sales grew in double-digits.
Hybrids addressing shortcomings of EVs
A hybrid vehicle combines two or more different power sources, an internal combustion engine (usually gasoline) and an electric motor. These vehicles improve fuel efficiency and reduce emissions by using the electric motor to assist engine during acceleration and to power the vehicle at low speeds, while the engine powers the vehicle at higher speeds and recharges the battery.
Shashank Srivastava, executive committee member of Maruti Suzuki India (MSIL), said the reason for slower adoption of EVs is the reason for faster adoption of hybrids. “The cost acquisition of EV is still high even as it has come down a bit. Electric sedans are priced at 1.6 to 1.7 times than its ICE counterpart. For SUVs, the ratio may be 1.35 to 1.45.
It is pretty high and this is one big reason,” he added. He said the second reason is range anxiety, which is always there among consumers. The fear of being left with a dying battery before reaching destination can be addressed by widespread charging infra.
“Hybrids don’t require charging…It runs on battery on urban cycle for nearly 40% of the time. The battery is being charged by the regenerative braking power and because it is done automatically, consumers don’t have to charge,” said Srivastava.
Hybrids to stay and thrive
Rohan Kanwar Gupta, vice-President & sector head, corporate ratings at ICRA, says hybrid cars are seen as an intermediate step in the ongoing transition to EVs, with range anxiety getting addressed, even as the upfront cost is also not that materially higher.
“As such, sales of hybrid cars have been outpacing electric car over the recent past; the same trend is expected to continue over near term, till a fall in battery prices and improved product launches lead to an acceleration in EV adoption,” added Gupat.
ICRA estimates EV penetration in the PV segment to reach levels of 4-6% in FY25 and increase to levels of 15% by FY30. MSIL too expect by 2023 their powertrain mix will be 15% EVs, 25% hybrids and the balance 60% of mix of CNG, gasoline and other options.
