With EVs clearly on the horizon for the industry, are Maruti and Toyota right to invest heavily into hybrids?
The future is electric. And, if you go by what companies like Tata Motors and Mahindra say, hybrids are definitely the past. Of course, it’s understandable why both homegrown carmakers would feel this way: neither has hybrid technology in its portfolio and the cost of developing such a system now would simply not make financial sense with EVs clearly on the horizon.
So why then is Maruti Suzuki, along with Toyota, investing heavily in strong hybrids now? Better late than never? In a manner of speaking, yes. Toyota brought the Prius – the first mass-produced hybrid car – into the world back in 1997 and in the two decades since, has refined its technology further. So while the hybrid step maybe late for India, it isn’t as costly or daunting a task as it is for others like Tata and Mahindra.
Beyond this, however, is the fact that Maruti has no diesel in its portfolio. Its newly developed 1.5 diesel had a big technical flaw (we carried an in depth analysis of this in our July 2022 issue), and when it comes to SUVs, diesel still accounts for over 50 percent of sales. It’s clear the brand has lost ground to others like Tata, Hyundai and Kia, all of which have diesels in their portfolios. Thus, a strong-hybrid is Maruti’s answer to diesels.
It’s a clever tactic. Strong hybrids deliver very high real-world efficiency, and with BS6 diesels priced substantially higher than their petrol counterparts, Maruti has decent headroom to price its hybrids competitively. It won’t be a walk in the park, though. Strong hybrids essentialy use two powerplants, and with their bigger batteries, they are expensive, but if anyone can price something competitively, it’s Maruti. So indeed, if priced right, the strong hybrid could be a good alternative to diesels.
And then, of course, there is CAFE, which is perhaps the biggest driver in the move to hybrids. CAFE or Corporate Average Fuel Efficiency is a limit set on the total carbon dioxide emissions produced by a carmaker’s entire fleet. And since CO2 emissions are proportional to the amount of fuel burned, carmakers need to make efficient cars. CAFE norms first came into effect in 2017-2018 and the second set of stricter levels came into effect earlier this year.
So far, no penalty has been announced, but it’s imminent, and manufacturers obviously want to make sure they are ready. Brands like Tata will look to EVs to offset the overall fleet average, while Maruti is clearly banking on strong hybrids, given that its EV plans are still a long way off.
But what do consumers make of strong hybrids? Many folks keep saying they feel like buying an EV as it’s the future, and thus, are reluctant to buy a petrol or diesel car. But as it turns out, there indeed seems to be demand for strong hybrids. Honda has not disclosed numbers, but says it has a seven-month waiting period on the City Hybrid. More interestingly, Maruti, which has bagged 29,000 Grand Vitara bookings, says 48 percent of those are for the strong hybrid. Clearly then, while EVs are the future, there’s lot of charge left in the hybrid.
Also see:
‘An SUV in each segment key to success’: Maruti Suzuki MD
Maruti, Toyota aim to leapfrog rivals with global EV skateboard, latest battery tech
India at 75: RC Bhargava on how Maruti came to be and what it is today
