India's Energy Shift Speeds Hybrid Vehicle Growth

India's energy transition is accelerating hybrid vehicle adoption faster than electric vehicles, driven by OEMs' expanding portfolios. A gradual increase in EV penetration is expected as technology and infrastructure improve. The automotive sector is undergoing significant changes, affecting both domestic demand and international exports, with optimistic growth forecasts.

In a dynamic shift towards green energy, India's hybrid vehicle penetration is set to outpace electric vehicles in the near to medium term, according to a recent Institutional Research report. The surge in hybrid adoption is attributed to Original Equipment Manufacturers (OEMs) expanding their hybrid portfolios.

The report highlights that electric vehicle (EV) adoption will see a gradual rise as technological advancements and charging infrastructure developments catch up. The automotive sector is experiencing a profound transformation, comparable to a once-in-a-century transition towards sustainable energy sources.

The domestic auto component industry is investing in adapting product portfolios to align with the energy transition, preparing for increased greener vehicle penetration. Despite current slowdowns due to inflation and urban demand pressures, rural demand is recovering, supported by favorable monsoon conditions.

The report forecasts the domestic passenger vehicle industry to grow at a 5-7 percent CAGR, with the two-wheeler segment expecting an 8-10 percent CAGR. The commercial vehicle industry is projected to begin an upswing by FY 2026, driven by economic growth and government-led infrastructure initiatives.

Additionally, the report shows optimism for India's automotive exports, boosted by the China+1 and Europe+1 diversification strategies, enhancing global market reach.

(With inputs from agencies.)