WHY INDIA CAN'T IGNORE HYBRIDS

HYBRIDS OFFER LOWER EMISSIONS AND HELP BRIDGE THE GAP TO FULL ELECTRIFICATION, BUT TAX ISSUES REMAIN A MAJOR HURDLE.

- By Karan Dhar

INDIA HAS SEEN a rise in demand for gas-guzzling sports utility vehicles (SUVs) in recent years. While there are several conventional ICE (internal combustion engine) SUVs in the market, only two are strong hybrids. That's because the government's policy emphasis is on electric vehicles and not much has been done to incentivise hybrid vehicles, which have higher upfront costs, just like EVs.

Of the 4.3 million cars sold in FY25, only 104,000 were hybrids. But despite fewer (five) models on offer, hybrid penetration rose from 2.1% in FY24 to 2.4% in FY25. In comparison, EVs accounted for 2.6% of total car sales in FY25 with as many as 17 mass-market models on offer.

Only a handful of Japanese automakers sell hybrid cars in the country. Toyota Kirloskar Motor accounts for over 80% market share in strong hybrid vehicles with models such as the SUV Urban Cruiser Hyryder, multi-purpose vehicle (MPV) Innova Hycross, sedan Camry, and luxury MPV Vellfire. India's largest carmaker Maruti Suzuki India Ltd currently sells two hybrid vehicles: Grand Vitara and Invicto, rebadged versions of Toyota's Hyryder and Hycross, respectively. Meanwhile, Honda, another Japanese player, has a minuscule share in strong hybrid vehicles. The three Japanese carmakers put together corner half of India's 4.3 million passenger vehicle market.

"Of the 4.3 million cars sold last fiscal, electric and strong hybrids accounted for just 5% of total sales. So, 95% of the market remains unaddressed. These conventional ICE cars will remain on the road for 15 years," says Vikram Gulati, country head and executive vice president, corporate affairs and governance, Toyota Kirloskar Motor.