Hybrid cars are winning as range anxiety grips EVs | Mint

Hybrid sales overshadowed electric cars in India in 2023. This is in spite of the fact that hybrids do not get tax concessions or incentives—unlike battery-operated cars. Is this just a blip or a definitive shift in consumer preference? What is driving it? Mint explains:

How are hybrid cars doing in India?

In 2023, sale of hybrid cars touched an all-time high of 82,607 units. This marked an over four-fold increase from under 20,000 units in 2022. In comparison, battery-operated electric car sales saw the tally nearly double to 81,710 units from round 41,675 units in 2022. This is the first time hybrid cars have outsold electric cars in one year. This, despite the fact that currently hybrid cars attract a GST of 43%—two percentage points lower than large petrol or diesel cars. Electric cars attract a much lower 5% GST. Due to the higher taxes hybrids are more expensive than their nearest electric counterparts.

What is fuelling this growth in hybrids?

Even though there are only six hybrid models available in India, the launch of the Maruti Suzuki Grand Vitara and Invicto and the Toyota Hyryder and Innova Hycross have led to the expansion of the segment. With its better fuel economy, Maruti Suzuki has used the hybrid version to offset the lack of a diesel powertrain in its line-up. Hybrid versions make up 22-23% of Grand Vitara’s overall sales. Hybrid technology lacks the rock bottom running cost. And the zero tail pipe emissions have all the advantages of an EV. But at the same time, hybrids don’t need to be plugged in for charging and there is no range anxiety.

Are sales of electric cars on a decline?

Electric cars continue to be in demand, but the growth is beginning to moderate as the pool of early adopters is exhausted. Against an industry target of 100,000 units in 2023, sales fell short by nearly 20%. Range anxiety and uncertain resale value of the cars are a headache. Additionally, charging infrastructure has not been able to keep pace with sales growth.

How are other fuel options faring?

Petrol remained the fuel of choice for new car buyers with a 65% share of new car sales in 2023. But it has lost over a 3 percentage point market share, largely to compressed natural gas (CNG), which saw sales grow 30% year- on-year and market share go up to 13%. Diesel was the second most popular fuel of choice with an 18% share of sales, though its share has been largely stable since 2020. CNG is likely to upstage diesel in the future. Hybrids and electric cars equally split the remaining share between them.

Should hybrids be incentivized?

The industry is divided. Carmakers Maruti, Toyota and Honda claim hybrids are more practical right now and are demanding a reduction in GST. Due to the higher fuel economy, hybrids are greener than a regular petrol or diesel vehicle. There is opposition to this by firms that have already invested in EVs and unanimity that electric solves the problem of expensive imported crude oil. Until a decent charging infrastructure is in place, experts say, it may make sense for some incentives for plug-in hybrids.