With over 70 percent of India’s power generation coming from coal-based power plants in the present day, an accelerated shift towards electric vehicles (EVs) might not be the ideal solution for the country, which is on a mission to achieve carbon neutrality by 2070, as well as lower its transportation emissions.
While EVs have gained global recognition as the most suitable zero-tailpipe-emission mobility solution for most vehicle categories, they do not necessarily emerge cleaner than internal-combustion-engine-based hybrid powertrains from a well-to-wheel perspective. According to RC Bhargava, Chairman, MSIL, “Almost 75 percent of India’s energy is today generated by coal, and while it is projected to come down to 50 percent by FY31, in the existing scenario, hybrids (cars) are cleaner than EVs in terms of total carbon emissions.”
Bhargava made the statement on the sidelines of the carmaker’s Q2 and half-yearly results announcement and added that the Indian passenger vehicle (PV) market is increasingly preferring hybrids over EVs, and the gap between the volumes for the two technologies is narrowing rapidly. “While the difference in the volumes of hybrids and EVs stood at 0.7 percent in H1 FY24, it is further narrowing down in the second half, and already stands at 0.3 percent,” he said.
“Customers are very happy with the performance and convenience of a hybrid compared to the challenges, particularly with respect to the range anxiety and charging infrastructure, being faced in case of EVs,” Bhargava added.
Tax cut to boost hybrid sales
However, with an intent to propel the PV industry towards making a quick transition to EVs, the Indian government has incentivised electric cars by placing them in the lowest tax slab of 5 percent GST, in comparison to petrol cars that see a levy of 48%, and hybrids, which, despite being greener, still attract a 43 percent GST rate. Japanese alliance partners Suzuki and Toyota are the leading OEMs in the Indian market to be pushing their hybrid technology in pursuit of the shift towards greener transportation solutions.
While Toyota offers its Atkinson-cycle-based gasoline hybrid powertrains in models like the Innova HyCross, Urban Cruiser Hyryder, Camry, and Vellfire, it also offers its proven technology to Suzuki, which offers it in the Maruti Suzuki Grand Vitara SUV that claims to drive in full-EV mode for up to 60 percent of its driving time on the road. Bhargava said that there is still a possibility that the government will recognise the fact that hybrid technology is a cleaner technology in Indian conditions at least over the next 8-10 years.
“The government has already acknowledged that a mixture of technologies will be required to achieve the carbon neutrality goals in India, and besides EVs, hybrids, bio-fuels, and CNG, are all part of the options.”
“Given that situation, the government may reconsider its stance on the taxation on hybrids, and reduce the existing 38 percent tax difference between hybrids and EVs. If that happens, the growth of hybrid technology in India could be even faster,” Bhargava said.
Full electrification not realistic
Maruti Suzuki India, which is well on its way to introducing its first all-electric model around the festive season of 2024, and targets to introduce five more models by the end of the decade, has consistently been advocating that complete electrification of India’s PV segment is not realistic. “A 100 percent EV penetration is not a realistic plan for a long time to come. With our kind of purchasing power, distribution of vehicles, and per-capita income levels, the idea that everyone will use EVs in the next 10-15 years, is not realistic,” Bhargava said.
“I think the industry’s experience over the last few years clearly tells that complete electrification of India’s PV segment is not going to happen, and even today, the EV penetration in the market is only at a little over 2 percent. Even in many parts of the world, it is being found that 100 percent reliance on EVs does not meet the requirements.
“The objective is not 100 percent electrification, it is carbon neutrality, and therefore, one must decide the way forward while considering the circumstances of each country to arrive at an appropriate mix of vehicle propulsion technologies to achieve the desired results. And therefore, the solutions relevant to Europe will not work in India, we will have to have different solutions. That is where the challenge is going to come to find the correct and appropriate solutions to the Indian market,” Bhargava said.