Hybrid cars surpass electric vehicles in India’s auto market

Hybrid cars are rapidly gaining popularity in India overtaking battery electric vehicle sales for three straight months this financial year.New car buyers are taking a penchant for the handful of hybrid vehicles currently on sale in the Indian market such as Maruti Suzuki Grand Vitara, Toyota Urban Cruiser Hyryder, Honda City and Toyota Innova Hycross. The increasing demand for fuel-efficient hybrid cars underscores customers’ growing environmental awareness and concern over the limited range and charging infrastructure challenges posed by fully electric cars.Sales of strong hybrid vehicles totalled 24,062 units in the three months to November, compared to 21,445 electric vehicles sold in the same period. This, despite the availability of a larger number of electric cars currently – 16 EVs compared to 4 strong hybrids.

Hybrid vehicle sales have been gradually gaining traction this financial year, before finally overtaking EV sales in the past three months. As many as 25,200 electric cars were sold in the local market compared to 14,400 strong hybrid vehicles in the June quarter. The gap narrowed in the September quarter when automakers sold 23,900 EVs and 22,000 string hybrids. However, from September onwards, strong hybrids have started outselling EVs, as per industry data.

Ease of owning hybrid vehicles which do not require dedicated charging infrastructure like EVs, better mileage compared to petrol cars, and lower acquisition costs are driving demand, said senior industry executives.

Shashank Srivastava, senior executive officer (marketing and sales) at market leader Maruti Suzuki confirmed sales of strong hybrid vehicles are on the rise and have outpaced those of EVs in the last three months. “Hybrid as a concept is catching on among customers. There is a realisation that under the current circumstances (when charging infrastructure is limited), it is a great option. Strong hybrid vehicles offer better fuel efficiency especially in city driving conditions, they are environment-friendly and not heavy in terms of acquisition costs despite electrics enjoying a tax benefit,” Srivastava said.

While the government currently levies 5% GST rate on electric vehicles, hybrids attract a GST rate of 43%. The acquisition cost of a strong hybrid vehicle, though, is lower at 1.28X, vs 1.5X for electric vehicles, compared with petrol counterparts.

Honda Cars India, which offers the strong hybrid technology in flagship sedan City, said with better availability, it expects the hybrid model to account for as much as 12% of total sales of the City.

At a time of increasing electrification in the Indian car market, Honda Cars India believes strong hybrids are a good bet as they are ‘practical and worry-free’. Yuichi Murata, the company’s director (marketing and sales), said the company has seen ‘encouraging’ demand for the strong hybrid variants of the City and the powertrain option will remain an important part of Honda’s strategy to grow its footprint in the country.

To be sure, hybrid cars are 20-30% pricier compared to conventional petrol cars, but deliver 35-40% higher fuel efficiency, and address range anxiety of vehicle buyers in a country where a widespread charging network is yet to be established, resulting in better-than-expected customer acceptance across all the three companies