India's transportation sector is in the fast lane of an electric revolution.
EVs are rapidly gaining traction. Soaring fuel prices, government backing, and aggressive green targets are supercharging this momentum. Billions are pouring into research, manufacturing plants, and charging networks, laying the foundation for a thriving EV ecosystem.
The impact is clear in the numbers by August 2024, nearly 30% of all passenger vehicle sales came from cleaner energy options like CNG, hybrids, and EVs, up from 25.8% just a year ago.
While EVs dominate the headlines for their futuristic appeal and zero-emission promises, hybrid vehicles-particularly strong hybrids and plug-in hybrids-are emerging as a compelling middle ground for consumers seeking sustainability without fully committing to electric vehicles.
Hybrids strike a balance between performance, fuel efficiency, and environmental friendliness. They deliver improved fuel efficiency and reduced emissions while maintaining the convenience of traditional powertrains, making them an attractive option for many drivers.
China, the world's largest auto market, has witnessed a remarkable surge in hybrid vehicle adoption. The hybrid penetration rate has quadrupled from 5.3% in 2021 to 19.9% in the first half of 2024.
Korea has also seen significant growth, with hybrid penetration rising from 11.8% in 2021 to 25.2% in 2024. Data from the Nomura Research Institute confirms that key markets like China, Japan, Korea, the UK, France, and the US have experienced similar surges.
Consumers view hybrids as a comfortable balance between electric technology and the familiarity of traditional internal combustion engines.
In India, although the electrified vehicle market is still relatively small, hybrid adoption is gradually increasing. The number of hybrid models is limited, but interest is rising, with hybrid penetration growing to 2.5% in the first half of 2024, up from 2% in 2023.
While these numbers may seem modest compared to global leaders, they signal a budding interest in hybrid technology among Indian consumers.
However, hybrids face competition from other green technologies, particularly CNG vehicles, which now account for 18.6% of India's passenger vehicle volume, showcasing a year-on-year growth of 15.4% in August 2024.
Government policies are crucial to the resurgence of hybrid vehicles. Supportive measures are making hybrid technology more cost-competitive, presenting an attractive alternative for consumers hesitant to fully transition to electric mobility.
The Karnataka state government is considering exemptions from road tax and registration charges for electric and strong hybrid vehicles priced below Rs 2.5 million (m). This could significantly alter the game, as the current rate, from 13% to 18%, dissuades many consumers.
A similar policy announced by the Uttar Pradesh government in July 2024 offers a complete waiver of registration taxes on strong hybrids.
Such initiatives could significantly support the growth of the hybrid segment, particularly for market leaders like Toyota and Maruti Suzuki, who dominate the Indian hybrid landscape. Tax waivers could enhance the attractiveness of hybrids for consumers seeking fuel-efficient alternatives to conventional vehicles.
The surge in hybrid vehicle sales is driven not just by government policies but also by evolving consumer sentiment. Increasingly, drivers are seeking sustainable transportation options without the range anxiety associated with full-electric vehicles.
Hybrids provide eco-friendly benefits, allowing for electric-only commutes while offering gasoline engines for longer journeys.
In regions with developing charging infrastructure, hybrids present a practical solution, enabling consumers to embrace cleaner technology without waiting for extensive EV charging station rollouts.
Beyond being cost-competitive, hybrid technology offers broader national benefits, particularly for countries like India.
Hybrids are not constrained by charging infrastructure, a significant barrier for EV adoption. They deliver impressive fuel efficiency improvements, estimated at 35% to 45% compared to conventional petrol or diesel vehicles.
This results in tangible savings for consumers and a reduced reliance on foreign oil.
Additionally, hybrids contribute to national CO2 reduction goals, offering a 25% to 30% decrease in carbon dioxide emissions compared to standard internal combustion engine vehicles.
Automakers are taking notice, with companies once focused solely on battery electric vehicles now investing in hybrid technology. This dual strategy-developing both BEVs and hybrids-provides the flexibility to respond to diverse market needs and regulatory pressures.
Maruti Suzuki, a market leader in India, has led the charge in hybrid vehicle adoption, introducing popular models like the Ciaz Hybrid and Ertiga Hybrid, underscoring its commitment to sustainable and fuel-efficient vehicles.
Although Toyota is not an Indian company, its joint venture with Maruti Suzuki has solidified its presence in the market, contributing to hybrid growth with models such as the Camry Hybrid and Corolla Hybrid.
Hyundai, likely to launch its IPO in October 2024, has also entered the hybrid space, launching models like the Kona Electric Hybrid and Ioniq Hybrid to cater to eco-conscious consumers.
Tata Motors, primarily known for electric vehicles (EVs), has ventured into hybrids with the Nexon EV Max Hybrid, offering the flexibility of electric and hybrid modes.
Mahindra & Mahindra, a prominent SUV manufacturer, introduced the XUV700 Hybrid, combining electric power and gasoline to meet consumer demand for efficient SUVs.
Sona BLW focuses on engineered automotive systems for hybrid and electric vehicles, including differential assemblies and fuel-efficient motors. Sona BLW specialises in high-power-density EV systems and traction motors, reflecting its commitment to the evolving automotive landscape.
NRB Bearings produces precision friction solutions like ball and needle roller bearings for hybrid and E-drive passenger vehicles and electric powertrains, exporting significant volumes to Europe, America, Japan, and Korea to support the rising demand for hybrid and electric vehicles.
Looking ahead, the hybrid vehicle market shows no signs of slowing down. It is likely to continue its upward trajectory, driven by supportive policies, technological advancements, and consumer demand for flexible, eco-friendly transportation options.
The growth of hybrids reminds us that the future of mobility isn't a one-size-fits-all solution. Instead, it's a landscape where various technologies will coexist, each playing a role in the transition toward cleaner transportation.
While the spotlight remains on EVs, hybrids are carving out their own path. With strong growth in key international markets and policy support in places like India, they are proving to be a viable, long-term solution for drivers and automakers alike.
As countries like China, Korea, and India continue to embrace this technology, the hybrid revolution could very well outpace expectations.
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