Opinion: Hybrid Cars Are Not Dead Yet

While most car segments have benefitted from the rollout of the Goods and Service Tax (GST), the withdrawal of the government’s FAME (Faster Adoption of Manufacturing Hybrid and Electric Vehicles) scheme has severely impacted the hybrid car segment. The lack of incentives to compensate for more expensive hardware in hybrid cars and higher prices may lead you to believe that India’s hybrid car era has been nipped in the bud. However, the hybrid party isn’t over yet. Here’s how.

At SIAM’s 57th annual convention held in New Delhi on 7 September 2017, the director general of The Energy Research Institute (TERI), Ajay Mathur, presented the fact that cleaner vehicles like EVs and hybrids would be able to meet the upcoming BS-VI norms more easily than conventionally-powered vehicles. Since electrification of petrol & diesel vehicles (read hybridisation) improves fuel efficiency and reduces emissions, manufacturers might just find it to be the right way forward to meet future emission norms.

There might be no connection between Mathur’s facts and Maruti Suzuki's decision of not taking out the mild-hybrid tech from the Maruti Ciaz and Maruti Ertiga despite the price disadvantage these cars now have over their conventionally-powered rivals. But the fact that Maruti Suzuki has never denied the trickle-down of SHVS (Smart Hybrid Vehicle by Suzuki) tech in cars below Ciaz and Ertiga is converging with Mathur’s logic of meeting BS-VI norms.

Like Maruti Suzuki, there are carmakers like Volvo who say that the government’s discontinuation of incentives for hybrid vehicles is not going to affect their product strategy and that they will bring hybrid cars to India in future.

While some carmakers are optimistic, there are manufacturers like Hyundai who have, for the time being, categorically denied hybridisation of their portfolio in India. At the launch of the new Hyundai Verna, the South Korean carmaker, who was rumoured to bring mild hybrid tech in the Verna and officially announce the launch of its hybrid icon - the Ioniq - in India, refused to bring hybrids into the Indian market in the near future.

Hybrid tech would be expected to make cars more expensive, but as the entire field adopts the technology, the playing field should remain more or less level. Moreover, upgradation of existing petrol-diesel fleet to BS-VI standard will result in vehicles becoming more expensive. It remains to be seen how things unfold, but there can be a possibility that the government might just have withdrawn incentives from hybrid cars with the belief that manufacturers would have to embrace this tech to meet new emission norms. As a result, hybrid car sales can be expected to be on auto-pilot mode in the near future. We won't have to wait too long to find out as BS-VI norms will be implemented from 2020.

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