Hybrid cars may roar past their electric cousins in the coming years after trailing them in the green transition so far, mirroring a pattern set in the US, Europe and South Korea.
The debut of new fleet-wide emission norms next year could prompt more carmakers to roll out hybrids to stay compliant, an internal Bureau of Energy Efficiency (BEE) document said, signalling a structural shift in energy mix in the world's fastest-growing automobile market. Mint reviewed a copy of the policy note.
While electric vehicles (EVs) that made up 4% of passenger vehicle sales in 2025 will rise to 11% by FY32, hybrids which held a mere 2.5% will shoot up to 17%, the Union power ministry's Bureau of Energy Efficiency (BEE) wrote in a January policy document. At the same time, the share of petrol- and diesel-powered vehicles which had 70% share at the end of 2025 will fall to 35%.
The BEE projections suggest many carmakers will turn to hybrids to comply with tough corporate average fuel efficiency norms (CAFE-3) rules. The predicted shift to hybrids comes at a time the Centre continues to push long-term electrification.
CAFE-3 norms debuting in April 2027 are stringent fleet-wide emission standards, aiming to reduce average carbon dioxide emissions to roughly 71.5 g/km by 2032. To meet these targets, automakers must significantly increase their production of electric and hybrid vehicles, as the norms penalize high-consumption fleets while awarding "super credits" for cleaner powertrains.
Dual strategy
According to Saket Mehra, partner at Grant Thornton, automakers are expected to follow a dual strategy as they look to increase efficiency of their portfolio which may result in a spike for hybrid vehicles.
"Hybrid vehicles are more adaptable and accessible with minimal infrastructure changes, making them a practical bridge technology... Automakers are implementing a dual-track strategy—introducing hybrids to meet immediate demand for fuel‑efficient, lower-emission options while continuing to invest in EVs for long‑term market transformation as infrastructure matures," Mehra said.
BEE has noted individual penetration levels of strong hybrids, battery EVs, plug-in hybrids, range-extended electric vehicles (REEV), and strong hybrids with flex fuel vehicles. It estimates that strong hybrids will have 12% share of the PV market by FY32, plug-in hybrids 1.3%, REEV 1%, strong hybrids with flex fuel 2.5%. Put together, hybrid PVs come to about 17% while EVs will have 11% share of the overall market. Vehicles running on compressed natural gas (CNG) are expected to have the highest share of 35%, according to the document.
In a strong hybrid, the battery charges automatically through regenerative braking, as well as from the petrol engine acting as a generator. A strong hybrid can run on electric power alone for short distances. A mild hybrid has a small battery and motor that assist the combustion engine for better fuel efficiency, but it cannot drive on electric power alone.
Some of the strong hybrids sold in India include Maruti Grand Vitara, Victoris, Toyota Innova Hycross, Urban Cruiser Hyryder, and Honda City. India has no plug-in hybrid or range-extended EV offerings. In India, mild hybrids are not classified as combustion engine vehicles, not hybrids.
‘Conservative estimates’
However, an industry executive involved in the discussions with BEE disagreed, stating the agency’s estimates are conservative, and EVs will still outpace hybrids.
“Given there are strict fines associated with the new norms, the regulator is being conservative. Moreover, it is taking into account all the uncertainties even as industry expects around 15%-20% EV penetration in the time period,” the executive said, requesting anonymity as norms are still being finalized.
“The assumptions of the agency appear to have also not taken into account the fact that subsidies for hybrid vehicles by many states like Uttar Pradesh and Chhattisgarh have also been discontinued and divergence between EVs and hybrids has increased.”
BEE, however, noted in that the projected vehicle mix takes into account the national objectives on electrification, clean energy transition, fuel diversification, and reduction of fossil fuel dependence.
“(Estimated fuel-wise sale distribution) demonstrates how a combination of market-driven changes in vehicle sales mix and regulatory compliance mechanisms together deliver progressive reductions in fleet-average CO₂ emissions,” the policy note reads.
Global trends
Notably, the agency’s estimates align with how electrification has panned out in global markets. According to data compiled by Nomura Research Institute for 2025, the share of EVs in the US was at 8% while hybrids constituted 14%. South Korea has 13% EVs while 29% are hybrids, and EU has 16% EVs and 18% hybrid vehicles.
Amit Bhatt, India managing director at International Council on Clean Transportation, said EVs made up 4.7% of all new car sales in the first three quarters of FY26, while the industry’s aggregate voluntary commitment is to reach 20% by 2030.
“At the same time, the Niti Aayog 2025 report cites a 30% EV share by 2030. A reported target of around 10-11% EV sales by 2032 under CAFÉ-3 appears unambitious, even relative to both the industry’s own commitment and the government’s stated ambition. The regulatory target should go beyond voluntary pledges and set a higher benchmark for the sector,” Bhatt said.
Top carmakers have ambitious targets for electric vehicles in the next five years. While Maruti Suzuki targets 15% EVs in its overall sales by FY31, Tata Motors and M&M aim for 30% by 2030, and Hyundai Motor India targets 17%.
Over the last one year, Mahindra has launched four new EVs, while Tata Motors added Harrier EV to its fold. The electric market has also seen the entry of VinFast and Tesla, along with Hyundai and Kia. This week, Maruti Suzuki also began the sales of e-Vitara, its first EV for the Indian market.
Catching up
However, hybrids are expected to pick up. Hyundai expects to launch around eight hybrids till 2030 while Renault will bring a strong hybrid variant of its newly unveiled SUV Duster. Carmakers like Kia, JSW MG Motors, JSW Motors, Honda, Maruti, and Toyota will all have hybrid vehicles in their lineup.
The projection of higher share of hybrid vehicles comes at a time when industry body Assocham is leading efforts to relax taxation for REEVs from 40% currently to 5% on par with EVs.
Incentives for hybrids have been a sore point in India’s automotive industry for some time now. Japanese companies which have mastered this technology have been lobbying for concessions to buyers of hybrid vehicles through lower taxation, direct subsidies to consumers, or the waiver of various state and central fees like registration charges.
However, rivals led by domestic carmaker Tata Motors and Mahindra & Mahindra have strongly opposed any such incentives as they argue this hurts the adoption of pure EVs.
The issue came to a head last April when the Delhi state government proposed to subsidize hybrid cars on par with electric cars. A draft of the Delhi Electric Vehicles Policy 2.0 proposed waiver of road tax and registration fees on electric cars as well as hybrids priced up to ₹20 lakh ex-showroom.
While the proposal is yet to make it beyond the draft stage, it rattled Indian carmakers, which moved various government bodies to lobby against equating hybrids with EVs.
Queries sent to Bureau of Energy Efficiency, Siam, Maruti Suzuki, Mahindra and Mahindra, Tata Motors PV and Hyundai Motor India remained unanswered.