Even as the government is promoting zero-emission electric vehicles (EV), hybrid electric vehicles (HEV) have been selling at record volumes and commanding a huge waiting period over the last few quarters, despite not attracting subsidies or tax benefits.
Consequently, a number of Japanese manufacturers like Maruti Suzuki, Toyota Kirloskar Motor (TKM), Honda Cars India, Lexus India, Nissan India, etc., are either ramping up their output or widening their offering of strong hybrids to meet the burgeoning demand.
HEVs, also known as strong hybrids, are a type of vehicle that are powered by both a battery and a petrol / diesel-powered conventional internal combustion engine (ICE). A mild hybrid works on the same principle, just that it has a smaller battery which is used to power electrical components like the air-conditioning, etc., and provide the engine with a small boost during acceleration. Mild hybrids cannot run on battery-power alone, unlike a strong hybrid.
Industry players reckon that the rise in the number of hybrids is largely due to the sharp increase in consumer acceptance for such technologies. Moreover, there is a growing section of car buyers who are not just looking for additional mileage vis-à-vis petrol versions, but are also very environmentally conscious.
Take the case of Krishnalaya Bhattacharjee, in his late 40s, who was looking for a new car to for his daily commute from his residence in south Delhi to his office in Gurgaon. Despite having the option of buying petrol / diesel SUVs, he went for the Hyryder strong hybrid variant.
“The hybrid version is giving me a mileage of 24-25 kms per litre of petrol, much higher than the 16-17 kms per litre a conventional vehicle with the same price tag would have delivered,” said Bhattacharjee, adding, “Till the time range anxiety is there and petrol is as expensive as gold, I will probably continue with hybrid cars whenever I upgrade.”
A study carried out by ICRA, an investment rating agency, demonstrated that even though hybrids command a 20-30 price premium over petrol variants, they manage to deliver 30-35 percent higher fuel efficiency, and charges the battery automatically while the car is running, enabling car companies to alleviate the range anxiety that is associated with EVs. Range anxiety is the fear that the EV will run out of charge en route to a destination, before it can be charged again.
A study carried out by ICRA, an investment rating agency, demonstrated that even though hybrids command a 20-30 price premium over petrol variants, they manage to deliver 30-35 percent higher fuel efficiency, and charges the battery automatically while the car is running, enabling car companies to alleviate the range anxiety that is associated with EVs. Range anxiety is the fear that the EV will run out of charge en route to a destination, before it can be charged again.
Numbers going upwards
As per data on the Vahan portal, the sale of hybrids (strong and mild) have skyrocketed from 44,530 units in 2017 to 1,59,887 units in 2022. The portal also shows that 1,66,370 hybrids have already been sold as of 18th June this year.
Puneet Gupta, Director at S&P Global Mobility, says, “The jump in hybrid sales is because of the drop in sales of diesel vehicles due to lack of demand, as well as manufacturers doing away with diesel options following the BS VI emission norms. In the absence of battery-run vehicles, hybrids are the only alternative for buyers who require high mileage in the Rs 10 lakh+ segment.”
Puneet Gupta, director at S&P Global Mobility, states, “Jump in hybrid sales is on account of exit from diesel options for many models. In the absence of battery-run vehicles, hybrid is the only alternative for buyers who have high mileage requirement above Rs. 10 lakh segments.”
Inflection point for mass market HEVs
The year 2022 has turned out to be a turning point for hybrid vehicles, with the entry of mass market models (sub-Rs 20 lakh) such as the Honda City Hybrid (May 2022), Toyota Hyryder (Sep 2022), and Maruti Grand Vitara Hybrid (Sep 2022). As per Autopunditz, the market for strong hybrids in the mass segment reached 19,556 units per annum in 2022. This number excludes the sale of high-end hybrid cars costing above Rs 20 lakh, as well as mild hybrids.
Sources from the Federation of Automobile Dealers Association (FADA) said that Maruti Suzuki and TKM had sold 12,828 and 20,931 units of the strong hybrid variant of the Grand Vitara and Toyota Hyryder, respectively, from September 2022 till May 2023.
The Grand Vitara is the re-badged version of the Toyota Hyryder. The two companies have agreed to share the manufacturing platform (where the exterior, powertrain, etc., is largely the same) and market re-badged versions of each other’s cars.
Maruti Suzuki said that 30 percent of the demand for the Vitara is for its strong hybrid variant, and added that it expects the share of hybrids to go up with the launch of the Invicto (re-badged Toyota Innova Hycross) on July 5th. Currently, the Vitara is the only car with a strong hybrid variant in the Maruti stable.
“These vehicles run on battery about 40-50 percent of the time, and cost around 1.25 times what the petrol version does (as against 1.5 times for EVs). Consumers have readily adopted hybrids. In fact, hybrid sales have been similar to that of EVs, even though they have been launched only recently,” said Maruti Suzuki's Senior Executive Officer Shashank Srivastava. He also said that the company is anticipating that strong hybrids will comprise 25 percent of the company’s overall sales by 2030, which translates to almost a million cars per annum.
Business Outlook
As per S&P Global Mobility, while HEVs accounted for less than 0.1 percent of passenger vehicle sales in 2021, the share went up to 0.5 percent in 2022. It is projected to jump to 4 percent this year.
“The future of hybrid vehicles looks promising as they offer a combination of efficiency, convenience, and affordability. Automakers are preparing to phase out cars powered solely by internal combustion engines, and the growth in electric and hybrid vehicles is climbing. Hybrid vehicles are seen as a stepping stone to carbon-neutral mobility and are more fuel-efficient and generate less noise than conventional vehicles," stated Ravi Bhatia, MD, JATO Dynamics, an automotive market research firm.
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