In the realm of India's automotive industry, the trajectory towards electrification has predominantly centred on battery electric vehicles (BEVs), often bypassing hybrid technology. However, global giants such as Honda, Toyota, and Maruti, leveraging Suzuki's technology, have introduced hybrid models in recent years, albeit with a considerable price premium compared to their combustion engine counterparts.

For instance, the price disparity between equivalent variants of petrol and hybrid versions of the Maruti Grand Vitara currently hovers around Rs 3 lakh, albeit with added features. Similarly, the premium for the hybrid variant of the Honda City sedan can exceed Rs 4 lakh.

The lack of government incentives has deterred other manufacturers from exploring hybrid powertrains. Nonetheless, the popularity of hybrids due to their lower running costs and relatively lower purchase prices compared to pure-EV equivalents suggests a potential for increased affordability in the future. Here are three avenues through which this could materialize:

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Reduced Taxation: While government incentives have primarily favoured pure EVs, recent statements by Minister of Road Transport & Highways (MoRTH), Nitin Gadkari, suggest a potential reduction in the GST on hybrid vehicles from the current 48 per cent to 12 per cent. Such a move, if enacted, could significantly narrow the price gap between hybrid and petrol variants.

Lower Material Costs: As EV demand and adoption rise, coupled with advancements in related technologies, the cost of input materials is expected to decline. Since battery packs constitute a substantial portion of hybrid costs, reduced battery prices could subsequently lower hybrid model prices. Additionally, increased hybrid demand may contribute to lower costs of metals and minerals used in battery packs.

Discount Incentives: Beyond taxation adjustments, further financial incentives in the form of discounts may be necessary. These incentives could be government-backed or manufacturer-sponsored, potentially including discounts for trading in old petrol or diesel vehicles for hybrid options.

These measures collectively signal promising prospects for enhancing the affordability of highly fuel-efficient hybrid models in the coming years. Presently, the Toyota Hyryder, Maruti Grand Vitara, and Honda City eHEV stand as the only mass-market strong hybrids available in India.

As the industry navigates towards a more sustainable future, initiatives aimed at reducing the cost barrier to hybrid adoption could play a pivotal role in shaping India's automotive landscape.

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