Case Study: Why Maruti’s Hybrids will be a Game-Changer!

Ever since Maruti Suzuki launched the Grand Vitara with a “Strong Hybrid” system, it has highlighted hybrids as a key solution for reducing carbon emissions and particulate matter. However, despite expectations, the Indian government maintained a high 43% tax on hybrids with engines of 1.2 liters and above in the recent budget. Despite this, hybrids are nearly outselling EVs like the Tata Tiago EV, Tigor EV, Punch EV, and MG Comet EV. This is largely due to the lack of range anxiety and the ability to refuel quickly while achieving 25-30 KMPL, unlike EVs, which require careful trip planning and access to charging stations.

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In the affordable hybrid segment, Maruti, Toyota, & Honda are the main players, with Maruti & Toyota dominating the market. Maruti for now uses Toyota’s Series-Parallel hybrid system in the Grand Vitara & Invicto, but it’s reportedly developing its own affordable Series Hybrid system. This could allow Maruti to pair the cars with smaller, & efficient 1.2 L engines taxed at 28% GST enabling them to offer hybrids at competitive prices between Rs. 12-13 lakhs.

This case study we’ll explore how it could revolutionize the market for hybrids in the era of electric, affordable electric cars and how reducing taxes on hybrids could accelerate the transition to EVs.

Sales:

Hybrids: 50,269 units
EVs: 47,148 units

Even with less available and expensive Hybrid cars as of now, it’s still outselling EVs.

What is Series Hybrid?

Series hybrids are vehicles where the internal combustion engine (ICE) generates electricity to power the electric motor or charge the battery. The electric motor is the sole driver of the wheels, with no mechanical connection between the ICE and the wheels.

How Series Hybrids Work:

– Electric Motor Propulsion: The electric motor powers the vehicle’s wheels.
– ICE as a Generator: The ICE generates electricity for the motor or to charge the battery when needed.
– Battery Storage: The battery stores electricity, allowing for electric-only driving when the ICE is off.

Why is it Affordable to Develop?

1. Simplified Transmission: A single-speed or reduction gearbox replaces a complex multi-gear transmission, reducing mechanical complexity and manufacturing expenses.
2. Modular Design: The series hybrid’s modular setup allows separate development of the electric motor, generator, and ICE, streamlining production and cutting costs.
3. Engine Optimization: The ICE runs at a constant speed, making it simpler and more efficient to engineer, which saves on design and manufacturing costs.
4. Potential for Smaller Engines: The engine, only generating electricity, can be smaller, reducing production costs.
5. Simplified Control Systems: Series hybrids require less complex controls, focusing on battery charge and motor power, which further reduces costs.

Drawbacks of Series Hybrids:

• Performance: Series hybrids may lack the high-performance output of traditional engines, especially during rapid acceleration, as the electric motor alone drives the vehicle.
• Highway Efficiency: It excels in city driving but may see reduced fuel efficiency on highways where the ICE runs more continuously to charge the battery.
• Limited Power Output: Relying solely on the electric motor can limit power output, particularly when the battery is low, affecting overall driving performance.
• Complexity: The need for both an electric motor and a generator (ICE) adds complexity, potentially leading to higher maintenance costs and technical issues.
• Battery Dependency: Heavy reliance on the battery for optimal performance can reduce fuel efficiency and increase emissions if the ICE is frequently used for charging, compared to parallel or full hybrids.

Reasons Why Maruti’s Series Hybrid System is a Game-Changer:

• Improved Mileage: Series hybrids can achieve a claimed mileage of 35-40 KMPL, with real-world figures easily reaching 25-30 KMPL, making them more fuel-efficient and cost-effective.
• No Range Anxiety: Unlike EVs, series hybrids eliminate range anxiety by using a petrol engine to generate electricity, ensuring continuous driving.
• Lower Initial Cost: Series hybrids typically cost less upfront than EVs due to cheaper batteries, making them a more affordable option.
• Less Dependence on Charging Infrastructure: Series hybrids can recharge the battery on the go using petrol, offering flexibility in areas with limited charging stations.
• Potential Savings: Hybrids can benefit from savings through reduced fuel costs thanks to higher efficiency compared to traditional engines.

Maruti Suzuki Targets 50% Market Share with Hybrid Focus Amidst SUV Competition:

Maruti Suzuki India Ltd. is aiming to capture 50% of the passenger vehicle market within the next two to three years by expanding its hybrid offerings, despite fierce competition in the SUV segment. Shashank Srivastava, the senior executive officer of marketing and sales, emphasized that reaching this target requires boosting their current 24.5% share in the SUV market.

To meet emissions targets and compete as electric vehicles grow in popularity, Maruti plans to introduce hybrid versions of the Fronx, Swift, Dzire, and other 1.2-liter models. With a 28% GST tax on 1.2-liter engines, a top-trim Swift hybrid is expected to be priced around Rs. 12.28 lakh, making it a competitive choice and could easily achieve 1250 – 1400 KMs range in a single full tank positioning Maruti Suzuki strategically in the market.

Conclusion:

Maruti’s new Series Hybrid System could be a major game-changer in the affordable car market, especially since it’s set to be offered in models priced under Rs. 15 lakhs. In contrast, competitors like MG and Kia are also expected to introduce hybrids with their models such as the MG Hector or Kia Seltos, but it might exceed Rs. 20 lakhs price point. This higher price could be a barrier for buyers who prefer budget-friendly options, giving Maruti a significant advantage.

MG Motors plans to stay competitive by frequently launching new models, but they’ll need to match Maruti’s reputation for affordability and reliability. With the Series Hybrid System debuting in Fronx in the first half of 2025, Maruti could gain a strong lead in the hybrid market.

This development might also attract the Government of India’s attention. If interest in hybrids grows, the government could lower taxes to 12%, making hybrids more appealing with better mileage and lower emissions, and encouraging more buyers to choose them.

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