The Future Of Mobility

- Mobility Outlook conducted 'Consumer Awareness on Hybrids.' One of the most striking findings of this survey was that over 29% of respondents were willing to spend INR 2.5 lakh extra to buy a hybrid vehicle.

The amalgamation of the benefits of an internal combustion engine and electric drivetrain is nothing but hybrid technology. Hybrid vehicles draw power from fossil fuels and electricity alike but still are the least talked about forms of mobility. It is as if the world wants to drive itself on the extremes - either petrol or electricity!

Estimates, as a matter of fact, suggest that the hybrid vehicle market will expand at a CAGR of 21.9% in this decade (2021 to 2031). While some of the factors driving this inspirational change include a need for fuel-efficient engines and cleaner environment goals, it remained largely unclear where the customer sentiment was. Governments worldwide are offering subsidies and tax incentives to individuals and institutions investing in electric and hybrid vehicles, but adopting the same is not as promising as it was once projected!

Keeping the challenges and opportunities in consideration, Mobility Outlook conducted a survey to find what consumers think about hybrid vehicles. Dubbed 'Consumer Awareness on Hybrids', one of the most striking findings of this survey is that over 29% of respondents are willing to spend INR 250,000 extra to buy a hybrid vehicle, and around 45% do not wish to buy a hybrid vehicle because of the higher cost over normal ICE variants. The whole idea of the survey was to understand how much the end consumer knows about hybrid cars.

About the survey, Kunal Behl, VP, Marketing & Sales, Honda Cars India, said, 'I think this is a very interesting survey. It has clearly brought out that the awareness about the difference between different types of hybrid needs to go up. People understand the difference between ICE and electric powertrains but the same is not the case with hybrids.' It is worth noting here that Honda Cars India has just launched a strong hybrid variant of Honda City e:HEV in the country.

Glimpses Of The Survey

1. 53% prefer to stay with ICEs, while 30% are interested in hybrids. EVs found the least of respondents (17%) interested.

2. Majority, 73%, knew the advantages and disadvantages of hybrid technology.

3. 37% prefer strong hybrid technology, while 34% are interested in mild hybrid vehicles. 29% opted for Plug-in hybrid vehicles.

4. 32% feel that environmental friendliness is the biggest advantage of the hybrid technology, and only 8% feel regenerative braking to be the biggest advantage.

5. 45% would not opt for a hybrid vehicle due to higher purchase costs, while 24% would not because of the fuel economy on highways. 16% feel hybrid vehicles are less powerful, and 15% think they have a higher running cost.

6.29% each is ready to extend their budget by INR 250,000 and up to INR 100,000 to purchase a hybrid over an ICE vehicle.

Note - A total of 155,096 responses were received in the survey. Individuals who took the survey were either car owners or intenders located across Tier-1, Tier-2, and Tier-3 cities in India. A majority (75%) of the respondents were below 35 years of age.

Awareness & Education Is Key

The key to making hybrid vehicles the talk of the town in India goes to the awareness route. The government, the OEMs, and every other constituent of the automobile ecosystem in the country needs to make maximum efforts to educate the end-consumer about the advantages and disadvantages of hybrid vehicles compared to ICE and EVs.

For instance, the newly launched hybrid variant of the Honda City e:HEV promises a mileage of 26Km/litre. Honda is also claiming that the technology is so strong that it automatically shuts off the petrol supply when the vehicle is being driven under 40Km/hr speeds. Moreover, Honda City e:HEV does not require to be plugged into a charger as the electric motors get charged using the regenerative braking.

'Hybrid has been in the market for around five to seven years but we never knew what hybrid was. There have been instances where the normal start-stop function has been termed a hybrid. Words like minor hybrid and mild hybrid feel like a word gimmick. It has just been a few days since the Honda hybrid was launched, and today, the customer is genuinely interested in owning and driving a hybrid. However, the knowledge around hybrids is lacking,' noted Vinkesh Gulati, President, FADA.

In comparison to EVs, Hybrids can provide a much better solution to the range anxiety problem. Similarly, the former against ICE vehicles can also help answer the problem of rising fuel prices. Gulati believes that a product like the recently launched Honda City Hybrid will help the dealer channel generate more enquiries. The awareness and consumer education campaigns, as per Gulati, should focus on the affordability, fuel economy, and environmental friendliness of hybrid vehicles.

'The biggest advantage of a hybrid vehicle is the fuel economy it delivers accompanied by its environmental friendliness. This is what the consumers should be educated about. In addition, we should also focus on helping consumers learn about how technology works. Honda City hybrid launch, as of today, is the first incident where the hybrid is being given a lot of importance,' said Gulati.

Payback Matters

'When I look at the survey, it becomes evidently clear that buying a hybrid vehicle is a dream of many customers. It all boils down to the cost of ownership when the people go out there to buy these vehicles. It is all about the payback,' said Ashim Sharma, Partner & Group Head, Nomura Research Institute.

The logic that Sharma used to give an example of the payback revolved around the difference in costs of Petrol, Diesel, and CNG a few years back. Diesel used to be more economical than petrol, and CNG used to be the most affordable fuel of them all. Today the prices of diesel and petrol are almost reaching similar levels, and the way CNG prices have risen after the UP elections, it appears as if the prices will surpass petrol sooner or later. Upfront cost or the purchase cost, as per Sharma, also plays a pivotal role.

'Market researchers like this are always very interesting to analyse and decode the market sentiments. Today, when a person is saying that he is more comfortable with ICE, less comfortable with EVs, and slightly more comfortable with hybrids, I will take that with a pinch of salt. Hybrid to me is the best of both worlds,' pointed out Avik Chattopadhyay, Co-founder & Partner, Expereal India.

Hybrids, like the Toyota Camry Hybrid, have been seen more in the luxury segment of mobility. Chattopadhyay is of the view that these were brought more as status symbols and less as environment-friendly vehicles. The average vehicle owner, as per him, is not conscious of a vehicle's environment-friendliness abilities. 'What the customer wants is reliability and affordability,' added Chattopadhyay.

'City e:HEV coming to India is the first step towards electric mobility. Hybrid vehicles are the best solutions for the mobility sector, and as someone has already said these offer the best of both worlds. Consumers definitely have range anxieties and coming up with an e:HEV means no worrying about range anxieties,' said Behl.

The City hybrid does not require the drivers to choose whether the car should be driven on petrol or electric power. As claimed by Honda Cars India, it automatically selects the fuel type in accordance with the conditions, resulting in high fuel efficiency.

India & Hybrids

Sharma said the smallest forms of hybrid technology, as small as start & stop engines via hybrid powertrains, have already proved their worth in a country like India, where stopping at red lights and starting the engine again are a part of the everyday commutes. However, in summers, this start-stop hybrid is also not of much worthiness as people tend to keep their cars on to keep the air conditioning working.

'With strong hybrids, we will be able to save a lot in fuel costs by not having to switch off cars at red lights. The hybrid will kick in and help save fuel and money.This will make more people understand the advantages of a hybrid vehicle over an ICE one. People might get self-educated once they start experiencing hybrid technology. A lot will also depend on how word of mouth takes place for hybrid vehicles,' explained Sharma.

There can further be regulations introduced by the government regarding how many vehicles (different powertrains) an OEM can produce. This might ensure the right amount of availability of different segments of vehicles in India. Hybrids, as per Chattopadhyay, will not be an interim solution.

The community needs to understand that aiming for zero-emission is like aiming for galactic stars, which is highly unlikely. 'We need to be clear that all of us have to play a role in cutting down emissions. You need to experience the hybrid to start singing praises about the same. It is so smart that it feels like a lot of AI has been used. To me, hybrids need to go mainstream. India cannot go completely electric. Hybrids will play a very important role in the country,' added Chattopadhyay.

It is worth noting here that electric vehicles fall under the 5% GST bracket, whereas the strong hybrid ones attract 43% GST. The key to making hybrid a mass technology, as per Behl, might lie in making favourable policies for hybrid vehicles.

Gulati concluded, 'Vehicle OEMs, with new CAFE norms setting in starting April 2024, might not have any other choice left then to offer hybrid and electric vehicles in their portfolio. Hybrid vehicles may be a choice today but they might become a compulsion sooner than we expect. It will become very tough for OEMs to survive in India if they do not agree to the norms set by the government. It is the time to see which of the OEMs can give us the best of products and create a win-win for all the parties involved.'