Why Renault is betting on hybrids in EV ‘outlier’ India

NEW DELHI: When Stephane Deblaise took charge of Renault’s India operations a little over a year ago, he brought a lesson from South Korea: car buyers do not necessarily replace their petrol or diesel cars with electric vehicles (EVs).

His first year in India has reinforced that view. Buyers still weigh engine performance, fuel efficiency, technology and price before choosing a car, the 54-year-old French chief executive told Mint. “The big picture I understood very quickly,” he said. “Engines are very important. Value is very important.”

That conviction is now shaping Renault’s biggest powertrain bet yet on the Indian market: a strong hybrid version of its flagship sport utility vehicle (SUV), the Duster, launched on Saturday.

India’s electrification story has so far been led by battery EVs, with strong hybrids lagging behind. EV penetration in passenger vehicles rose to about 8.5% in September from 5.7% a year earlier, according to Federation of Automobile Dealers Associations (Fada) data. Strong hybrids, by contrast, have remained at around 2%.

EVs accounted for one-fifth of incremental growth in the car market in fiscal year 2026 (FY26), with electric car sales surging 84% to nearly 200,000 units. Strong hybrids, offered in India by Japanese carmakers Maruti Suzuki, Toyota Kirloskar and Honda Cars, remain a much smaller segment.

But the global experience suggests that the transition away from conventional engines need not be an all-electric one.

In the US, hybrids accounted for 16% of the market in the second quarter of 2026, against 6% for EVs, according to the US Energy Information Administration. In the European Union, hybrids made up 36.6% of new car registrations in the first eight months of 2026, compared with a 21.7% share for battery EVs, according to the European Automobile Manufacturers’ Association.

“Even the most advanced country for BEV is not only BEV,” Deblaise said.

He argues that the pace of adoption depends as much on policy and customer preferences as on technology. “The percentages are only depending on policies. They are depending on policies and customer appetite.”

“The BEV is relatively high these days. It's a huge gap. But it is helped by the 5% tax. If we would not have 5%, it would be 0.5%,” he said.

India charges 5% goods and services tax (GST) on EVs, while hybrids have not received equivalent treatment, with these vehicles—mostly large SUVs—taxed at 40%.

Mileage versus price

For Deblaise, the bigger question is whether customers can adopt electric mobility without compromising on convenience. Charging infrastructure and the time needed to recharge remain constraints, he said. “A car, it is freedom. But a BEV car, today, it is not freedom.”

Hybrids offer a way to improve fuel economy without requiring buyers to change how they use their cars. That is the opportunity Renault hopes to exploit with the Duster Strong Hybrid, its first full-hybrid offering in India.

The SUV's 1.8-litre powertrain and 1.4-kWh battery deliver a claimed mileage of 29 km per litre, allowing Renault to pitch it against diesel SUVs that have traditionally attracted buyers seeking fuel efficiency.

“29 kilometres per litre in hybrid is a game changer in India. There is no doubt. Our strong tech hybrid is the new diesel,” Deblaise said.

The proposition, however, comes with a price trade-off. Hybrid powertrains cost more than conventional petrol and diesel systems, making the upfront purchase price a key hurdle in a market where value remains central to buying decisions. Renault is banking on localization to improve the economics over time.

Deblaise said the company had spent nearly a decade developing the technology, including its battery and gearbox. “We are not trying to introduce innovation in India to check if our idea is good. We have already done it,” he said.

Lesson from South Korea

Deblaise’s confidence in hybrids draws partly on an earlier decision in South Korea, where engineering constraints prevented Renault from launching hybrid and internal-combustion engine (ICE) versions of a new car simultaneously.

He chose to launch the hybrid first. “I said, okay, we launch first the hybrid,” he recalled.

The hybrid eventually accounted for 92% of the car’s volumes over its lifecycle, despite a relatively high price gap between the two versions. Deblaise said the result did not mean customers had rejected conventional engines.

“There was nothing against ICE. But we had a very good solution on hybrid,” he said.

He does not expect India to replicate South Korea’s 92% share. But he believes hybrids can account for a meaningful portion of Renault’s sales. “We should have a big part of our volumes. A big two-digit percentage of our volumes in hybrid,” he said.

The bet comes as Renault seeks to revive its fortunes in India. According to Society of Indian Automobile Manufacturers (Siam) data, Renault’s sales rose 32% to 23,122 units in April-September 2026, when the Duster rolled out.

Whether the hybrid strategy can sustain that recovery remains an open question. Deblaise acknowledged that offering customers more choice may not be enough to bring every former or potential buyer back to the brand.

“Some people maybe will never come in Renault because they don't want. It will take time for them to come.”