Hyundai, Tata, Mahindra, Kia look to take hybrid route for portfolio diversification

The Maruti Suzuki Grand Vitara is among the largest-selling hybrid SUVs in India.

After original equipment manufacturers (OEMs) like Maruti Suzuki India, Toyota Kirloskar Motor and Honda Cars India, mass market players such as Hyundai Motor India, Tata Motors, Mahindra & Mahindra, and Kia India are exploring the hybrid option to further diversify their passenger vehicle (PV) portfolio.

The strong hybrid technology is offered by Maruti in the Grand Vitara SUV and the Invicto MPV, Toyota in the Urban Cruiser Hyryder SUV and the Innova Hycross MPV, among others, and Honda in the City e:HEV sedan.

Hyundai, Tata, Mahindra and Kia currently have petrol, diesel and electric cars in their line-up. Hyundai and Tata offer CNG models as well.

Although several OEMs have, in the past, referred to hybrid technology as a 'transitional technology' between internal combustion engine (ICE) and electric vehicle (EV), the hybrid segment has witnessed growth, despite limited models to choose from.

Moreover, the hybrids have kept pace with the EVs in terms of volumes even when the electric cars receive several benefits from the central and state governments in the form of a lower GST (5%), nil compensation cess, and road tax exemption (up to 100% by several states).

While hybrids, like ICE models, fall under the 28% GST slab, they enjoy a road tax waiver of 100% in Uttar Pradesh only. However, the hybrids attract a compensation cess of at least 15% in addition to GST.

In FY25, the hybrid segment witnessed volumes of 104,800 units, accounting for a 2.4% share of the PV market. In comparison, the EV segment stood at 118,096 units, contributing 2.7% to the car market in India.

During an exclusive interaction with Moneycontrol, Hyundai Motor India Whole-Time Director and Chief Operating Officer Tarun Garg said, "Focus is definitely on EVs. We are creating an entire ecosystem for EVs. But, India being such a big country, there is space for all kinds of technologies. And Hyundai Motor Group has access to all kinds of technologies. They are investing in all kinds of technologies. So, as Hyundai Motor India, as such a strong part of Hyundai Motor Group, we should take advantage of all the technologies which are available to us. Hyundai Motor Group has plug-in hybrids, strong hybrids, EVs and even hydrogen."

Globally, there is so much success for hybrids, Garg said, adding that India has an opportunity for all kinds of technologies. "And as Hyundai Motor India, we would like to play a very important role in all kinds of technologies," he observed.

A source at Mahindra said that a hybrid SUV is a possibility. "The technology is not an issue for us. However, it all depends on where the volumes are," he added. Sources at Tata and Kia said that the respective companies are looking at hybrid options.

A government source said that although OEMs like Tata and Mahindra are focusing on EVs at present, they are also open to hybrids. "If they see demand, they might introduce hybrids," he added.

Hyundai sells EVs like the Creta Electric and the Ioniq 5. Among the EVs offered by Tata are the Tiago.ev, Tigor.ev, Punch.ev, Nexon.ev, Curvv.ev and Harrier.ev. Mahindra's EV portfolio includes the XUV400, BE 6 and XEV 9e. Kia is present in the EV space with the EV6 and the EV9.