Hybrids Trump EVs in India Despite Higher Costs

More Indian drivers are saying “hybrids yes, EVs not yet” when it comes to their next car purchase. A new study by Deloitte found that over one-third of respondents prefer hybrids over pure electric vehicles, despite government incentives making EVs price competitive. Lingering concerns around charging infrastructure and battery safety are trumping EV’s environmental appeal. This highlights the need for more hybrid incentives if India wants to accelerate the shift away from petrol and diesel vehicles.

Japanese automakers in particular are pushing hybrids to meet emissions goals, but most global brands remain focused on EVs. With buyers still unwilling to pay much extra for green technology, subsidies will likely be needed for years until EV sales penetration hits 20% in the Indian market.

A 2024 study by Deloitte found that more Indian car buyers intend to purchase hybrid vehicles rather than electric vehicles for their next car, despite government incentives making EVs price-competitive – 36% preferred hybrids versus just 10% for EVs. Factors like lack of charging infrastructure and battery concerns continue to limit EV adoption in India, so automakers like Toyota and Honda are using a mixed powertrain strategy including hybrids and calling for hybrid incentives. However, most EV intenders are unwilling to pay much more than for gasoline cars, indicating subsidies will be needed for years until EV sales reach 20% in India.

The study found that close to 36% of respondents said they will prefer hybrids or plug-in hybrid electric vehicles (PHEVs), compared to just 10% opting for battery electric vehicles (BEVs). This is a 4 percentage point jump for hybrid preference compared to 2023, double the increase for EVs.

Overall, 53% of respondents in 2024 said they intend to buy a non-traditional engine vehicle, up from 49% in 2023. This indicates a growing shift away from petrol and diesel vehicles in the Indian market. The preference for hybrids over pure EVs comes despite government incentives for EVs at both central and state levels. These incentives have allowed automakers to price EVs competitively compared to more expensive hybrid models.

According to Deloitte, factors like charging time, lack of charging infrastructure, and concerns over battery safety continue to limit faster BEV adoption in India. “People want to buy hybrids over EVs as it offers peace of mind that EVs can’t,” said Rajeev Singh, Deloitte’s Asia Pacific consumer industry leader.

Singh suggested the government should incentivize PHEVs, which offer EV-like charging benefits plus a gasoline engine fallback. Most automakers are focused solely on EVs to meet emissions goals, but Japanese brands like Toyota, Suzuki and Honda are using a mixed powertrain strategy including hybrids. They have called for hybrid incentives to make these models more affordable.

The study also found EV intenders are not willing to pay much more compared to internal combustion engine vehicles. Just 29% of EV intenders said they would spend 15-25 lakh rupees, only slightly higher than the 27% for ICE intenders.

“In India, while buyers talk about environmentally friendly tech, not many are willing to pay more when it comes to an actual purchase,” said Singh. He noted that subsidies will likely be needed for several more years until EV sales penetration reaches 20% in India.

In contrast, EV intenders in Japan are more willing to pay a premium thanks to greater affordability and eco-consciousness, Singh added.

Team Profile

Shubham ChakrabortyNews Writer

Shubham Chakraborty, a Freelance Writer, holds an MBA from XLRI and boasts 6.5 years of extensive corporate experience. Departing from his corporate path, he embarked on a journey to fulfill his childhood dream of focusing on writing.

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