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Indian consumers’ desire to move away from gasoline-based cars should have been Tesla and BYD’s moment to shine in the world’s third-largest auto market. But the legacy carmakers that have dominated the Indian market for decades have hybrid cars.
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big story
hybrid cars are Expected to reach 10% of total car sales in India While the share of EVs is expected to be 5% in the financial year ending March 2027, according to a report by Indian research firm Care Ratings.
Punit Gupta, director of S&P Global Mobility, who focuses on the Indian market, told CNBC that cost-conscious consumers who were earlier buying diesel vehicles have started buying hybrid vehicles.
Sales of hybrid vehicles have increased almost four times world’s third largest According to Care Ratings, the auto market reached 362,866 units in the financial year ending March 2026 from 98,010 units in the financial year ending March 2020.
Meanwhile, the report based on vehicle registration data from the Indian government shows that the annual sales of electric vehicles till March 2026 stood at 131,865 units.
“It is clear that hybrid cars (in India) are gaining popularity faster than EVs in the passenger car segment,” Diwakar Murugan, senior automotive analyst at Omdia, said in an email to CNBC. He said it was “remarkable” that hybrids are punching above their weight, with just eight models in the market so far, compared to more than 40 EV models that have achieved strong growth.
Global EV companies should start moving away from internal combustion engine, or ICE, vehicles Tesla And BYD In India, but it turns out that Japanese manufacturers, who already dominate India’s auto sector, are set to strengthen their hold on the market by offering hybrid cars instead of pure EVs.
Tesla has sold less than 400 cars in India since 2025, while BYD has sold less than 7,000 cars. According to government data.
Even automakers in the EV sector Mahindra & Mahindra And Tata MotorsWhich mainly sell ICE cars, are the leading players. This is a stark contrast to BYD and Tesla’s global dominance: in 2025, BYD becomes the world’s top EV seller with 2.26 million units, while Tesla sold 1.64 million units.
rise of hybrids
Among hybrids, Japanese toyota And Maruti Suzuki Indian subsidiary of – suzuki motor – Toyota is the top manufacturer in India with popular models including the Innova HiCross and Maruti Grand Vitara, said Arun Aggarwal, vice president of fundamental research at Indian brokerage Kotak Securities.
These companies already dominate the broader Indian auto market, where the majority of their sales are ICE vehicles.
Maruti Suzuki leads auto sales with sales of over 1.8 million cars in the 12 months ending March 2026, including 20,466-strong hybrids, according to data from auto industry body Society of Indian Automobile Manufacturers, according to data shared by S&P Global Mobility.
Japanese-Indian joint venture Toyota Kirloskar Motors sold 366,896 cars during the same period, with 91,536 being hybrids.
Hybrid cars come in light and strong variants depending on their battery capacity. Unlike mild hybrids, strong hybrids can run entirely on electric power – for shorter distances at lower speeds – resulting in better fuel efficiency.
New Delhi, India – 2022/07/01: Press correspondents seen around the vehicle during the launch. Toyota unveiled the new urban cruiser Hayrider at the Hyatt Aerocity, which is Toyota’s first self-charging strong hybrid electric SUV and the first of its kind in the B SUV segment in India. (Photo by Pradeep Gaur/SOPA Images/LightRocket via Getty Images)
Sopa Images | LightRocket | getty images
Given the increasing customer acceptance, experts said that in the next 12 months, more hybrid cars are expected to be launched than in the last five years.
“Hybrids do not require any behavioral change as consumers refuel at petrol pumps as they always do,” Murugan said, adding that hybrids offer better mileage without the range concerns of EVs.
This trend is likely to continue, experts told CNBC, as several major car companies in India are launching new hybrid models this year, attracting buyers looking for better fuel efficiency. Meanwhile, EV adoption in the country is hampered by a lack of adequate charging infrastructure, limited access to affordable global EVs and concerns about resale value, Gupta said.
Hyundai And didFrench car manufacturer Renault, Honda Analysts said Maruti Suzuki is planning to launch new hybrid models for Indian consumers.
Meanwhile, despite warming relations between India and China and a trade deal between New Delhi and Washington, both Tesla and BYD are waiting to gain their share of the world’s third-largest auto market as they face excessive tariffs.
need to know
America wants to make big energy inroads in India
the united states is Intensifying efforts to sell oil and gas to India as the world’s third largest energy source The market is grappling with supply disruptions from the Middle East and options shrinking after Washington ended waivers for Iranian and Russian crude.
India, South Korea aim to deepen ties amid geopolitical uncertainty
Trade uncertainty with the US and pressure to diversify away from China make India and South Korea natural partners – but their relationship has yet to translate from intention to meaningful implementation.
Wouldn’t be surprised if there’s ‘one more term’ before US-India trade deal
Sarah Bianchi, former deputy US trade representative and currently senior managing director of Evercore, said that given the difficult issues involved in the US-India trade talks, there could be more changes before the deal is finalized.
is coming
April 23: HSBC composite flash PMI for April
April 28: India’s industrial production for March
