Indian consumers prefer hybrids instead of EVs despite few models and high tax: Deloitte

At a time when the domestic automobile industry is undergoing a transition, Indian consumers have an increased preference towards hybrids instead of EVs, according to the 2025 Global Automotive Consumer Study- India, released by Deloitte on Tuesday. As per the study, 21% of the surveyed consumers prefer hybrid vehicles to battery electric vehicles (8%) despite the limited number of models and a higher GST on hybrid vehicles.

At present, battery electric vehicles attract a GST of 5%, whereas hybrid models have a 48% GST. Notably, compared to more than 20 battery electric vehicle models, the Indian automotive industry only has 4 hybrid models. The penetration of hybrids and EVs currently stands at 2.5%. 

“If you look at hybrids, they're also at 2.5%, and the price point of a hybrid is 70 to 80% higher or 60% higher than an EV average. Still, the penetration is the same as that of EVs, which means that people are willing to pay more for hybrids. Why people are not taking EVs at such a breakneck speed is probably the reason that people are still confused or rather concerned about the time required to charge and the lack of public EV charging infrastructure. People who can pay more – they are not paying, probably, for EVs; they are paying for hybrids,” says Rajat Mahajan, Partner and Automotive Sector Leader, Deloitte India.

According to Atul Jairaj, Partner – Automotive Sector, Deloitte India, unlike BEV, which has witnessed a decline in the past year, there has been a pronounced rise for hybrids in Japan and the US. “This is very interesting because we do believe that more and more hybrids are going to become the bridge between ICE and BEV. The future may not necessarily be a complete BEV future as fast as we want it to be. Maybe hybrids are going to play that role,” says Jairaj.

Notably, amongst hybrids, plug-in hybrids are the most preferred choice for consumers in the US, China and some parts of Europe. As per the report, 12% of the Indian consumers prefer plug-in hybrids over EVs. 

However, a lack of policy support is hindering the introduction of plug-in hybrids in India. “We are seeing hybrids not being treated at par with EVs. It is actually on par with ICE (internal combustion engine) vehicles when it comes to GST now. Maybe that is one reason why OEMs are not investing in building plug-in hybrids, despite research and development going on,” observes Mahajan.

“Also, the markets which are very strong in the plug-in hybrid space, which is China and also some parts in Europe, we are not importing enough from these markets for us, for the Indian customer, to experience,” adds Mahajan.