HSBC: Hybrid Cars Are Powering India’s Electric Vehicle Momentum

Hybrid cars are accelerating electric vehicle (EV) adoption in India, rather than competing with battery-powered vehicles, according to a new report by HSBC Global Research. The study suggests that India’s automotive future will be multi-powertrain, relying on a mix of Battery Electric Vehicles (BEVs), Strong Hybrid Electric Vehicles (SHEVs), CNGs, and biofuels as the nation transitions toward clean mobility.

Hybrids and BEVs Serve Different Buyers

HSBC analysts found no cannibalization between SHEVs and BEVs. Instead, each technology appeals to a distinct customer base, and in many states, incentives for SHEVs coincide with strong BEV sales growth.

“SHEV adoption is having a positive effect on BEV uptake,” the report noted, citing data from Uttar Pradesh, India’s top passenger vehicle (PV) market.

Electric Growth Stats: FY25 and Beyond

India’s four-wheeler EV penetration jumped from 1.9% in early FY25 to 3.2% in Q1 FY26, bolstered by new model launches like the MG Windsor and Mahindra BEVs.

Meanwhile, SHEVs increased their market share in India’s PV segment from 2.1% in FY24 to 2.4% in FY25, showcasing steady consumer interest, especially when value and reliability are proven.

EV Confidence Grows with Innovation

The report highlighted consumer willingness to adopt EVs when companies address core issues like battery replacement costs and range anxiety. For instance:

• MG Windsor mitigated battery cost concerns with leasing solutions.
• Mahindra’s BEVs offered large battery packs, positioning EVs as stylish and practical.

Hybrids Replace Diesel, Not EVs

Introduced in September 2022 by Maruti Suzuki and Toyota Kirloskar, SHEVs appear to have captured market share from diesel vehicles, not BEVs. This shift continued through FY23 and FY24 and stabilized in FY25, despite rising government incentives.

A Collaborative Path Forward

HSBC concluded that supporting SHEVs complements BEV growth, creating a broader clean mobility ecosystem rather than a zero-sum game. The report emphasized the importance of government support, new vehicle launches, and customer-focused innovation in accelerating India’s EV transition.

Conclusion:
India’s road to electrification is being shaped by inclusive strategies, with hybrids and BEVs working together to build a sustainable automotive future. As HSBC highlights, support for multiple clean fuel technologies may be the key to unlocking widespread EV adoption across the country.