Alternative-fuel cars overtake petrol in India for the first time

Mangalore Today News Network

New Delhi, Sep 8, 2026: India’s passenger vehicle market witnessed a significant shift in August, with cars powered by alternative fuels—CNG, electric and hybrid combined—accounting for a larger share of retail sales than petrol-powered vehicles for the first time.

Alternative-fuel vehicles accounted for 41.95% of total passenger vehicle sales in August, surpassing petrol’s 40.85%, according to data released by the Federation of Automobile Dealers Association (FADA) on Monday. In August 2025, petrol had led alternative fuels by 11 percentage points.

The shift comes amid growing consumer interest in alternative powertrains and continuing uncertainty surrounding the transition to E20 petrol. The Centre mandated 20% ethanol blending in petrol from April 1, 2026, a move that has triggered public and political debate.

“Dealers attribute the shift to running-cost economics and continuing consumer hesitation around the E20 transition, which is nudging petrol buyers towards CNG, hybrids and EVs,” said FADA President Sai Giridhar.

CNG vehicles accounted for 25.28% of passenger vehicle sales in August, followed by hybrids at 9.04% and electric vehicles (EVs) at 7.63%. Meanwhile, the share of diesel vehicles declined to 17.21%, compared with 18.37% in August 2025.

Although petrol recorded its lowest-ever share of the passenger vehicle market in August, it remained the largest individual fuel type. Its share stood at 46.37% in August 2025.

EV sales also continued to gain momentum across vehicle categories. Total EV retail sales, including passenger vehicles, three-wheelers and two-wheelers, rose 52.9% year-on-year to 2.98 lakh units. Overall EV penetration increased to 12.3% in August 2026, from 9.5% a year earlier.

EV penetration in the three-wheeler segment climbed to 65.30%, while in the two-wheeler segment it increased to 10.68%, compared with 7.66% in August 2025. However, petrol continued to dominate the two-wheeler market, accounting for nearly 90% of new sales.

Diesel continued to dominate tractors, wheeled construction equipment and commercial vehicles. Nearly all tractors and wheeled construction equipment sold in August were diesel-powered.

In the commercial vehicle segment, petrol’s share fell to 3.15% from 4.26% a year earlier, while EV penetration more than doubled to 5.18% from 2.06%. Diesel-powered vehicles accounted for nearly 80% of commercial vehicle sales during the month.

Overall, 24.23 lakh vehicles were retailed in August, down 6.48% from July but up 17.51% year-on-year. FADA attributed the strong annual growth partly to the low base of August 2025, when buyers had deferred purchases ahead of the GST rate cut announced by Prime Minister Narendra Modi in his Independence Day address.

Passenger vehicle sales followed a similar trend, rising 16.14% year-on-year but declining 3.40% month-on-month. Total passenger vehicle sales stood at 4.02 lakh units in August.

Dealers remain cautiously optimistic about the months ahead. According to an FADA survey, 67.09% of dealers expect sales to grow in September, while 27.35% expect a flat market and 5.56% anticipate a decline.

For the September-November period, 81.62% of dealers expect growth, 17.09% expect the market to remain flat and only 1.28% foresee a decline.