Hybrid vehicles are complementing, not competing with, the growth of electric vehicles (EVs) in India, according to a recent HSBC Global Research report. The study highlights that both Strong Hybrid Electric Vehicles (SHEVs) and Battery Electric Vehicles (BEVs) attract distinct customer bases, contributing to the overall expansion of the clean mobility ecosystem.
Distinct Customer Segments for SHEVs and BEVs
The report emphasizes that SHEVs and BEVs are not cannibalizing each other’s market share but are instead appealing to different sets of consumers. This differentiation allows both vehicle types to coexist and thrive in the Indian automotive market, catering to varied consumer preferences and needs.
State Incentives Correlate with BEV Sales Growth
In states like Uttar Pradesh, where incentives are offered for SHEVs, there has been a notable increase in BEV sales as well. During FY25, the growth in EV sales mirrored the growth in SHEV sales, suggesting that the adoption of SHEVs positively influences the uptake of BEVs.
Multi-Powertrain Approach for India’s Transition
HSBC Global Research reiterates that India’s automotive landscape will remain a multi-powertrain industry in the medium to long term. Hybrids, along with CNGs and biofuels, are seen as practical solutions as the country gradually moves towards full electrification.
New EV Models Driving Market Penetration
The introduction of new EV models has contributed to increased EV penetration in the market. Over the past six months, the launch of new EV models has boosted their market share, with four-wheeler EV penetration rising from 1.9% in H1FY25 to 3.2% in Q1FY26.
Hybrids as a Bridge to Full Electrification
The perception that promoting SHEVs hinders EV adoption is considered misplaced by the report. Instead, SHEVs are viewed as a bridge technology that supports the broader development of the clean mobility ecosystem, facilitating a smoother transition towards full electrification in India’s automotive sector.
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