Alternate fuels overtake petrol in passenger car sales

In August, alternative powertrain vehicles in India's passenger car market surpassed petrol-powered cars for the first time, according to the Federation of Automobile Dealers Associations (FADA). Alternative fuels now account for 41.9% of passenger vehicle retail sales, surpassing petrol at 40.8%. CNG emerged as the leading alternative, accounting for a 25.2% share followed by hybrids at 9% and EVs at 7.6%.

A year ago, petrol had led with nearly 11 percentage points more market share. Diesel cars made up 17.2% of retail sales.

This shift in consumer preferences is driven by factors like lower running costs of CNG, improved efficiency of hybrids without heavy reliance on charging infrastructure, and growing EV adoption. FADA attributes this change to running-cost economics and buyers' hesitation around the E20 transition. Petrol remains the single-largest fuel type, but its dominance is waning. Maruti Suzuki dominated the CNG segment with around 71% share, while Tata Motors led the electric passenger vehicle market with about 43% share.

The market shift is evident in two-wheelers as well, with EV penetration rising to 10.7% in August from 7.7% a year earlier, marking the first time EVs crossed the 10% mark in a non-festive month. Three-wheelers have been further along the transition, with EVs accounting for 65.3% of sales, up from 56.6% a year ago. Commercial vehicles are also moving towards electrification, with EV share doubling to 5.2%, an all-time high for this segment.

Overall, EV retail sales in August reached 2.98 lakh units, a 52.9% increase year-on-year. This broader signal suggests that India's mobility transition is not solely centered on EVs; consumers are increasingly opting for a diverse range of fuel alternatives based on their specific use case, price, and available infrastructure.