Strong hybrids rev up to fly past EVs in green race as car sales make a pit stop

Sales of strong hybrid vehicles are growing in high double digits, sharply outpacing a sluggish Indian auto market where demand for both fossil-fuel and electric vehicles have slowed this year.

To be sure, the growth in strong hybrid vehicle sales is on a small base but the shift in market dynamics underscores growing consumer appetite for fuel-efficient cars amid high fuel prices.

As many as 23,394 strong hybrid vehicles were sold in the June quarter, a 62.5% surge from a year earlier, according to industry estimates. This compares with a modest 3% rise in total domestic passenger vehicle sales at 1.03 million units in the same period.

EV sales remained largely flat at about 22,000 units in the first three months of FY25, reflecting consumer worries about driving range and resale value of these cars.

Incentives announced by the Uttar Pradesh government on strong hybrids, adding to its existing financial support to full electric vehicles are among factors stirring interest in hybrids. The UP Industries Department announced on July 5 that it will waive off registration charges on hybrid and plug-in hybrid vehicles with effect from July 1, translating into benefits of ₹1.5-3 lakh per vehicle, based on the model and variant. The incentive, which narrows the price gap between hybrids and corresponding petrol models, is effective till October 2025.

ETB-1-25082024

Hybrids have 2% market share
“We have observed a significant rise in demand for hybrid cars in recent months. Our Honda City hybrid saw a 35% growth in July 2024 compared to June 2024,” Honda Cars India vice president (sales and marketing) Kunal Behl told ET. He said the share of Honda’s City hybrid model to overall City sales reached 13% this April-July, from 11% in the year-ago period.Maruti Suzuki is reaping a fifth of its sales from strong hybrid versions of the Grand Vitara sport-utility vehicle.

Partho Banerjee, senior executive officer (marketing and sales) at India’s top carmaker, said, “It (strong hybrid) is a new technology we have introduced in the mainstream market in the country. We have been running a campaign and educating customers about the benefits. We are seeing a continuous improvement in demand, as more and more customers are experiencing these vehicles and discovering value in them.”

Take for instance, Niharika Dev (name changed), a communications professional working in the NCR, who bought a Toyota Hyryder strong hybrid SUV late last month. Dev had two asks while choosing a new vehicle-she needed an automatic car to make the daily run to office (19.5 km each way) in heavy city traffic, and the fuel bill shouldn’t pinch.

The Hyryder helped cut her fuel costs by 30-40%, while incentives announced by the UP government reduced the initial acquisition cost by about Rs 1.5 lakh.

These and several other factors ranging from concerns over resale value of EVs despite lower running costs, and apprehensions over battery life and vehicle range are making some customers adopt strong hybrid vehicles, industry insiders said.

The share of EVs in new car sales in India is currently almost on a par with strong hybrids-at about 2%-even though there are comparatively fewer hybrid models on sale currently.

The UP government recently decided to continue extending incentives on both full electric and strong hybrids under the state’s EV policy, despite objections from some companies.

While EV makers such as Tata Motors and Mahindra & Mahindra say governments (Centre and states) should invest resources for transitioning to zero-emission vehicles like electrics, hybrid makers such as Toyota, Maruti Suzuki and Honda contend that a multi-technology approach (which includes encouraging adoption of ethanol, flex-fuel, biogas, hybrid and battery electric vehicles) is better suited to reduce emissions in a diverse country like India.

With several launches in the mass segment from the likes of Tata Motors, M&M, Citroen and MG Motor India, EV sales have grown steadily in the past few years, albeit on a low base.

The initial traction in the segment, though, has now started to abate. Electric car sales fell 3% on-year, marking the third straight month of decline, triggering fears that the Indian market may be mirroring a broader slowdown in global EV sales.

Sparse charging infrastructure and higher prices of EVs are deterring potential buyers, despite the higher running costs of petrol and diesel cars.

India has about 12,000 public charging stations, compared with 87,000 fuel stations dispensing petrol and diesel. Range anxiety is prompting manufacturers like Maruti Suzuki, Toyota and Honda to explore alternate technologies like hybrids, CNG, flex-fuel to clamp down emissions, while India readies an ecosystem for EVs.

Rajeev Singh, partner and consumer industry leader at Deloitte Asia Pacific, attributes the slow adoption of EVs to high acquisition costs and range anxiety among consumers. Such vehicles are typically 1.35 to 1.7 times more expensive than the corresponding petrol cars. “As battery prices drop, more models are launched and charging infrastructure improves, the adoption rate (of EVs) will increase,” Singh said.

FOLLOW US ON GOOGLE NEWS

Read original article here

Denial of responsibility! Swift Telecast is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – swifttelecast.com. The content will be deleted within 24 hours.

Leave a Comment