Indian automakers JSW Motors and Mahindra & Mahindra (M&M) have indicated a willingness to explore range-extended electric vehicles (REEVs) for the domestic market, but only if the government's policy framework extends fiscal incentives beyond pure battery electric vehicles (EVs). This development comes amid a broader industry debate on the viability of such transitional technology, with experts cautioning against equating it with zero-emission EVs.
What are Range-Extended Electric Vehicles (REEVs)?
REEVs, also known as REX hybrids, are vehicles that are always driven by an electric motor. They carry a small internal combustion engine (ICE), but its sole function is to act as a generator to recharge the battery when it runs low, unlike strong hybrids where both the engine and electric motor can directly power the wheels. Currently, no carmaker in India manufactures or sells REEVs, while strong hybrids are offered by Japanese brands like Toyota, Maruti Suzuki, and Honda.
The discussion around REEVs gained traction after industry lobby group Assocham proposed in November 2025 that they be taxed at just 5%, aligning them with EVs. This was followed by American automaker Ford Motor Co.'s December 2025 announcement of a strategic pivot towards hybrids, including REEVs, while writing off a $19.5 billion investment in pure EVs.
Automaker Perspectives and Policy Ambiguity
In an interview during the XEV 9S launch in November 2025, Nalinikanth Gollagunta, CEO of M&M's automotive division, described the technology as a "small dip" from a pure EV. He stated that while the company's current focus is on EVs due to the regulatory environment, REEVs remain an optionality if policies change. "Going to REX is an optionality we can have if we need to have it," Gollagunta said.
Echoing this conditional interest, Ranjan Nayak, CEO of the upcoming JSW Motors, highlighted the role such technology played in China's EV adoption. He pointed out that consistent incentives and policy inclusion helped plug-in hybrids and REEVs become foundational there. However, he warned that ambiguity in GST classification risks placing REEVs under higher tax slabs, making them less affordable. JSW Motors plans to launch its first vehicle in the October-December quarter of 2026.
Assocham, whose members include Maruti Suzuki, Toyota, JSW Group, and M&M, has argued to the Ministry of Heavy Industries that the current tax structure would make REEVs prohibitively expensive due to their typically heavier and larger build.
The Expert Debate: Transitional Tech or Distraction?
Despite industry interest, experts urge caution. Amit Bhatt, Managing Director of the International Council on Clean Transportation (ICCT), notes that while REEVs have no tailpipe emissions during operation, they still rely on a gasoline-powered engine as a generator. "Such vehicles will still have emissions in their overall operations, unlike an EV," Bhatt explained. He questions whether India should spend time and energy incentivizing a technology that may only play a short-term transitional role if the ultimate goal is full electrification.
This debate is set against a backdrop of evolving consumer preferences. A Deloitte 2025 Global Automotive Consumer Study found that only about 8% of Indian consumers preferred a pure battery EV, down from 10% in 2024. In contrast, 33% of consumers showed a preference for hybrid EVs and plug-in hybrids.
Meanwhile, EV sales in India saw robust growth, rising 76% to approximately 178,000 units in 2025, capturing about 4% of the passenger vehicle market. Tata Motors led with nearly 70,000 EV sales, followed by JSW MG Motor at around 52,000, and Mahindra & Mahindra selling over 33,000 units during the year.
The future of REEVs in India now hinges on a critical policy decision: whether to widen the incentive umbrella to include vehicles that bridge the gap between conventional fuel and pure electricity, or to maintain a firm focus on accelerating a direct transition to zero-emission mobility.
