Hyundai Sees EVs Leading Powertrain Shift, Hybrids Emerging as Next Diesel

Electric vehicles will lead India’s shift towards cleaner mobility, with hybrids gaining ground as the market develops, according to Tarun Garg, Managing Director and CEO of Hyundai Motor India.

CNG will remain relevant in vehicles priced below ₹15 lakh, while diesel will continue to find buyers among SUV owners and long-distance users, Garg said. Hyundai will offer different powertrains based on vehicle price, segment and usage rather than rely on a single technology.

“We are a technology-agnostic company. India is a very big country, and different segments have different customer preferences,” Garg told Autocar Professional.

“At Hyundai, we don’t have one solution,” he said. “Entry-level cars and those priced up to around ₹15 lakh will go with petrol and CNG. After that, we will have petrol, diesel, EVs and other technologies.”

EVs Take the Early Lead

According to Garg, electric vehicles and hybrids each accounted for around 2.5% of the Indian passenger vehicle market in 2024. EV registration penetration has since increased to more than 7%, while hybrids remain at around 2.4-2.5%.

“Our expectation was that EVs would see a leap, and once EVs reach a certain level, hybrids will start gaining ground,” he said.

Hyundai’s new electric SUV is scheduled to arrive in the fourth quarter of 2026. Hyundai Motor Company has described it as an A-segment electric SUV localised and designed for India, while Garg said it would be the company’s first EV developed and designed specifically for the country.

The model will join the Creta Electric and Ioniq 5 in Hyundai’s Indian portfolio. Garg expects the three vehicles to take Hyundai’s EV share close to the broader passenger vehicle industry within the next year.

“With the new EV, the Creta EV and the Ioniq put together, next year we could be very close to the industry penetration,” he said.

Garg expects the factors influencing EV purchases to extend beyond price and driving range as customers gain experience with the technology.

“So far, EVs have largely been about range and price,” he said. “I think the key buying factors will change towards the customer experience, how the car communicates with the customer, connectivity and artificial intelligence.”

CNG Focused Below ₹15 Lakh

Hyundai expects CNG demand to remain concentrated in the mass market, where acquisition price and running costs are important considerations.

“We believe CNG should be for cars priced up to a maximum of ₹15 lakh, not beyond that, because the customer’s key buying factors are different,” Garg said.

In higher-priced vehicles, customers tend to give greater weight to performance, drivability, space and convenience, he added.

Garg cautioned against linking a manufacturer’s presence in CNG with its ability to compete in premium segments. A carmaker’s position in the market depends on several factors, including its products and brand identity.

“If you see Hyundai’s DNA, it is linked to technology. I think that is very important,” he said.

Diesel Retains Its Place

Garg expects diesel to remain relevant over the next few years, particularly in SUVs and for customers who frequently undertake long-distance journeys.

“I don’t see any issue with diesel in the next few years,” he said. “Until the customer wants it, we will have all the technologies which we can present to customers.”

He declined to say whether Hyundai would continue offering diesel until 2032 or through the introduction of BS7 regulations.

Hyundai withdrew diesel engines from its smaller cars but retained them in larger vehicles, where demand remains stronger.

“We knew CNG was a much better solution for a small-car customer, not diesel,” Garg said.

Hybrids Could Become the Next Diesel

Hyundai expects to introduce hybrids once the products, localised cost structure and supplier ecosystem are ready. Garg indicated that these elements could come together over the next couple of years.

“Whenever we come, we want to localise so that we can give it at a price which is acceptable to the customer,” he said. “The ecosystem also needs to be ready. We feel all three things will happen in the next couple of years.”

The company is evaluating hybrids across several segments, although Garg sees limited scope for the technology in basic entry-level hatchbacks because of the additional cost.

He believes the profile of a conventional hybrid buyer will be similar to that of a diesel customer. Both place importance on running costs and driving range, while a conventional hybrid does not require external charging.

“In future, hybrid could be the next diesel,” Garg said.

Garg said buyers considering vehicles priced around ₹20 lakh may accept a hybrid premium of 10-15% over an equivalent petrol model.

He expects future emission regulations to raise the cost of conventional petrol vehicles, while localisation could lower the cost of hybrid systems and narrow the price gap.

“We want to give the customer what he wants rather than have one technology and try to force it on the customer,” Garg said.