Why carmakers aren’t launching plug-in hybrid cars in India

While India has opened up to strong hybrid cars, and there are at least six such models — Honda City e:HEV, Toyota’s Vellfire, Camry, Hyryder and Innova HyCross, and Maruti Suzuki Grand Vitara — the plug-in hybrid technology is yet to catch up.

What is plug-in hybrid?
First, let’s understand all electrified technologies.

Mild hybrid: These use a tiny 48V battery and an electric motor that increase the efficiency of the internal combustion engine (ICE, usually petrol). Fuel efficiency can be 7-8% better than regular ICE cars (also thanks to technologies like idle start-stop). Maruti Suzuki’s Smart Hybrid is a mild hybrid technology.

Hybrid electric vehicles (HEVs): These run on two sources of power: ICE and electric motor (powered by a small lithium-ion battery, usually 1 kWh). The engine runs the car and also charges the battery. Once the battery gets charged, the electric motor runs the car for a few kilometres, after which the engine takes over and the process gets repeated. Fuel efficiency improvement is about 30%. For example, the regular Hyryder returns 21.12 km/litre, but the Hyryder HEV returns a whopping 27.97 km/litre.

Plug-in hybrid electric vehicles (PHEVs): These get a bigger battery (5-15 kWh) and a charging cable to charge it. These have a long electric-only range. Toyota Prius PHEV, for example, can travel up to 100 km only on electric power.

Battery electric vehicles (BEVs): Also called electric cars, BEVs have battery ranging from 17.3 kWh (MG Comet EV) to 107 kWh (Mercedes-Benz EQS).

Why PHEV makes sense?

“PHEV is possibly just the right technology for the Indian market,” said an automotive analyst. “A recent study by Nielsen found that 88% Indians travel less than 30 km per day, and so a PHEV can be driven like a BEV within cities. For long distance travel, it functions like a self-charging electric car.” He added that even though most carmakers have PHEV technology, they are not launching it in India because hybrid technology is being treated similar to ICE as far as taxes are concerned. The current GST on BEVs is 5% across the board. For ICE vehicles, the tax rate (including compensation cess) is 28% for small vehicles and 45% for large ones, and it is the same is for HEVs and PHEVs. “What this means is that even though hybrid technology falls between BEVs and ICE — and can act as the bridge towards electrification of mobility — these don’t get any tax advantage,” Vikram Gulati, country head & senior vice-president, Toyota Kirloskar Motor, told FE. “The ideal GST structure for HEVs and PHEVs should be 11-13% lower effective tax than ICE vehicles. We are not asking to be at par with BEVs, but hybrids shouldn’t be punished.” An industry veteran told FE that PHEVs are complicated and high-technology vehicles. “These have an electric motor, ICE, battery pack, onboard charger, generator, transmission, charging port and fuel tank, so the upfront cost if high,” he said. “If you add high GST to an already expensive car, the car will become prohibitively expensive. Carmakers don’t want to take a business risk.”Subhabrata Sengupta, executive director, Avalon Consulting, told FE that for PHEVs cost economics needs to be evaluated. “PHEVs have a higher cost than BEVs on a cost-per-km basis at the moment,” he said.

PHEV cars in India

The first PHEV in India was Volvo XC90 T8 Excellence. Launched in 2016 priced Rs 1.25 crore (ex-showroom), it was discontinued in 2022.The Mercedes-AMG GT 63 S E Performance, launched last month priced Rs 3.3 crore, is a PHEV.

Best of both worlds

PHEVs have components from both electric and ICE cars—Electric motor (runs the car in pure-electric mode, usually 50-100 km)—Petrol engine (runs the car when the battery runs out of charge)—Battery pack (usually 5-15 kWh)—Charger (just like electric cars have)—Generator (generates electricity with the help of the engine and charges the battery)—Transmission (gearbox, just like ICE cars have)—Fuel tank (to run the engine)