Alternative Fuel Vehicles Gaining Ground in India’s Auto Market
NEW DELHI: Alternative fuel passenger vehicles are quickly closing in on petrol-powered cars in India. In July, CNG, hybrid, and electric vehicles made up 40.6% of sales, just behind petrol’s 41.7%. This shift is a significant change from last year, when alternative fuels lagged by 13.2 percentage points, indicating a fast-growing interest among buyers.
July marked a historic month for the automobile retail market, with overall registrations rising 25.8% to reach a record 25.9 lakh units. For the first time, all vehicle categories—including two-wheelers, passenger vehicles, commercial vehicles, three-wheelers, tractors, and construction equipment—saw their highest sales figures for the month. This broad demand shows an optimistic trend in the automotive industry.
Passenger vehicle sales alone jumped 19% compared to the previous year, surpassing the four-lakh mark for the first time with 4.1 lakh units sold. Within this segment, CNG vehicles represented 24.6% of total sales, hybrids accounted for 8%, and electric vehicles made up 7.9%. Although hybrid cars still primarily run on petrol, they are classified as alternative vehicles because they mix an internal combustion engine with an electric powertrain, enhancing efficiency and reducing emissions. Meanwhile, petrol’s market share fell to 41.6%, down from 47.6% last year.
Factors such as new model launches, price benefits from recent GST changes, and a consumer shift towards lower running costs have all contributed to the growing appeal of alternative powertrains. Additionally, some buyers appear to be shifting toward CNG, hybrid, and electric vehicles due to uncertainties surrounding the transition to E20 fuel.
The rise in alternative fuels is also evident in the two-wheeler segment. Electric two-wheelers reached a record 11.2% of retail sales in July, up from 7.7% last year. Overall, electric vehicle registrations climbed across all segments, totaling 3.28 lakh units for the month and bringing the EV market share to about 12.7%, up from 9.6% the previous year. In July, Maruti Suzuki continued to lead the passenger vehicle market, selling over 1.6 lakh units.
