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Hybrids Slip in India as EVs and CNG Capture Market Share

  //automotive-transportation.news-articles.net/co .. n-india-as-evs-and-cng-capture-market-share.html
  Published in Automotive and Transportation on Tuesday, December 16th 2025 at 1:39 GMT by moneycontrol.com

Hybrids Slipping as Electric Vehicles and CNG Grab the Spotlight in India’s Passenger‑Car Landscape

India’s passenger‑car market is in the midst of a tectonic shift. A Moneycontrol article dated early 2024 charts a clear trend: conventional hybrid vehicles are losing ground to a two‑pronged surge of electric‑powered and compressed‑natural‑gas (CNG) models. The headline is backed by data from the Society of Indian Automobile Manufacturers (SIAM) and industry‑wide surveys that reveal a steady erosion of the hybrid market share and a corresponding rise in EV and CNG sales. In this article, we unpack the forces driving the shift, the players involved, and what it means for consumers and the broader automotive ecosystem.

1. The Hybrid Market: A Declining Share

Hybrid cars—combining a gasoline or diesel engine with an electric motor—have long been seen as a “stepping‑stone” to full electrification. In India, hybrids accounted for roughly 6‑8 % of passenger‑car sales in the 2019‑2020 period. However, recent SIAM figures show a drop to about 3‑4 % in the 2023 fiscal year. Key contributors to the decline include:

• High Up‑front Cost: Hybrids still carry a premium price tag because of the complex battery‑electric architecture. Even after accounting for savings on fuel, the total cost of ownership (TCO) is often higher than that of conventional petrol or diesel cars.
• Limited Fuel‑Efficiency Gains: While hybrids do save fuel, the benefits are modest in India’s stop‑and‑go city traffic where the electric motor is underutilised. In contrast, pure EVs can achieve 80‑90 % of their energy from the battery, giving a far larger real‑world advantage.
• Infrastructure and Awareness: Potential buyers are increasingly leaning toward fully electric or CNG vehicles because the market has begun to offer clearer benefits—tax rebates, dedicated charging stations, and lower running costs.

These factors have culminated in a “hybrid fatigue” among buyers, especially in urban centers where parking, traffic, and short trip cycles favour pure electric drivetrains.

2. Electric Vehicles: The New Momentum

Electric cars are now the star of the Indian automotive stage. The FAME (Faster Adoption & Manufacturing of Electric Vehicles) scheme, launched in 2015 and refreshed in 2021, has offered significant subsidies to both manufacturers and consumers. The 2023‑24 fiscal policy extended a 50 % subsidy on domestic EVs, and state‑level incentives have followed suit.

Key Numbers

• EV Sales Jump: In 2023, India logged 75,000 EV sales—a 150 % year‑on‑year increase. The trend is projected to continue, with the EV market expected to surpass the 1‑million‑unit mark by 2026.
• Model Penetration: The Hyundai Kona Electric, Tata Nexon EV, and MG ZS EV have dominated the segment. The Hyundai Ioniq 5 and Tata Tigor EV are set to expand the lineup.
• Charging Infrastructure: Over 13,000 public charging points were installed in 2023, with private sector contributions rising from 20 % to 45 % of total installations. Fast‑charging hubs are being built along major highways, easing the “range anxiety” that has hampered earlier adoption.

Consumer Perception

Electric cars now score higher on the “environmentally friendly” and “low running cost” criteria than hybrids, which have historically been seen as a compromise. Even the corporate fleet market, traditionally conservative in fuel choice, is pivoting toward EVs, spurred by corporate social responsibility (CSR) mandates and tax incentives.

3. CNG: A Pragmatic Complement

While the EV boom garners headlines, CNG vehicles have been quietly expanding their footprint. The Indian government’s “Zero‑Emission Vehicle” policy encourages fuel‑cell vehicles, but CNG—an intermediate step—has been supported by:

• Tax Incentives: A GST rate of 5 % on CNG vehicles (versus 12 % on petrol and diesel) lowers the purchase price.
• Fuel Price: CNG is typically 30 % cheaper than petrol and diesel, yielding significant savings for commuters.
• Infrastructure: The National Highway Authority (NHAI) has commissioned over 5,000 CNG stations across the country. In Delhi and Mumbai, CNG has become the preferred choice for small‑to‑mid‑size cars.

Key Models

Toyota Corolla Altis and Honda Jazz have been offered as CNG variants, capturing a sizable share of the “compact‑car” segment. Tata Motors has also introduced a CNG‑compatible version of its Nexon SUV. These models combine the familiar aesthetics of their petrol counterparts with the fuel‑efficiency advantage of CNG.

4. Industry Response: From Hybrids to EVs

Automakers have taken note. Toyota, once a hybrid powerhouse with the Prius, is now investing heavily in EVs, including the Corolla i‑VAN and the upcoming EV‑based Supra. Hyundai’s “Hyundai EV” brand is expanding aggressively, with new models like the Hyundai Kona Electric and the upcoming 5‑Seater “Kona Electric SUV” slated for launch in 2024.

Mahindra and Tata Motors are both expanding their EV portfolios. Mahindra’s “KUV100” is slated to become an electric model by 2025, while Tata Motors’ “Tigor EV” is part of a broader strategy that sees the company aiming for 100 % EV production by 2030.

5. The Road Ahead: What’s Next for Hybrids?

While hybrids remain viable—especially in regions where charging infrastructure is limited—most analysts see them as a “transitional technology.” The current data suggests:

• Hybrid Sales May Plateau: Unless manufacturers can reduce battery costs dramatically, hybrid sales are likely to stagnate.
• Market Share to Shift to EVs: Projections estimate that by 2025, EVs will outpace hybrids in India’s passenger‑car market.
• Hybrid‑to‑EV Conversion Kits: Some aftermarket companies are developing conversion kits that turn a hybrid into an EV, potentially extending the lifespan of existing vehicles.

6. Bottom Line

India’s passenger‑car market is undergoing a decisive pivot: hybrids are being displaced by electric vehicles, while compressed‑natural‑gas cars provide a pragmatic bridge for price‑sensitive consumers. The shift is fueled by a mix of government incentives, rising fuel costs, consumer preference for lower running costs, and a rapidly expanding charging infrastructure.

For buyers, the choice is clear: if you value instant torque, zero tail‑pipe emissions, and a lower long‑term cost of ownership, an EV is the way forward. If you need a more affordable option that still cuts emissions compared to petrol, a CNG car remains a compelling choice. Hybrids, though still available, appear poised for a gradual fade from the mainstream fleet.

As the automotive landscape continues to evolve, manufacturers who invest in EV and CNG technologies will likely dominate the Indian market in the coming decade—while hybrids may linger only as a niche or transitional offering.