New Delhi, May 21 (IANS) EV penetration in India has improved with new model launches over the last six months, and new model launches and government incentives will drive hybrid penetration growth in the near term, an HSBC report said on Wednesday.

Contrary to popular assumptions, hybrids are not currently competing with EVs, but rather, are complementary to them. For instance, in states with hybrid incentives, EVs have grown more even after incentives were announced, said HSBC Research in its note.

“We think India will remain a multi-powertrain industry over the medium to long term,” it stated.

Hybrids, CNGs and biofuels are practical medium- to long-term solutions, while the country moves towards eventual electrification.

“We think strong hybrid electric vehicles (SHEVs) and battery electric vehicles (BEVs) are not cannibalising each other but, rather, are attracting different sets of customers. In states where incentives are offered for SHEVs, BEV sales have also seen strong growth,” said the report.

In FY25, the growth in EV sales was similar to the growth in SHEV sales, despite incentives being offered on SHEVs by Uttar Pradesh, the largest PV selling state in India.

This trend suggests that SHEV adoption is having a positive effect on BEV sales, said the report.

According to the report, 4-wheeler EV penetration has improved from 1.9 per cent in H1 FY25 to 2.5 per cent in Q4 FY25 and 3.2 per cent in the Q1 FY26 quarter-to-date period, driven by launch on MG Windsor and M&M BEVs.

The SHEV share in total PV has increased to 2.4 per cent in FY25 from 2.1 per cent in FY24.

“The perception that promoting SHEVs will hinder EV adoption is misplaced, in our view. This is not a zero-sum game, but rather an incremental opportunity where incentivizing SHEVs contributes to the broader development of the clean mobility ecosystem, benefiting BEVs and advancing overall market growth,” the report emphasised.

–IANS

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