In a first, alternative fuel vehicles outsell petrol cars in India

In a landmark shift for India's automotive sector, vehicles powered by alternative fuels—including electric, hybrid, and CNG—outsold traditional petrol cars for the first time in the fiscal year 2025-26. According to data from the Society of Indian Automobile Manufacturers (SIAM), alternative fuel vehicles accounted for 52% of total passenger vehicle sales, while petrol variants fell to 48%. This marks a decisive turn in consumer preference, driven by rising fuel costs, government incentives, and growing environmental awareness.

The trend is particularly pronounced in urban centres, where charging infrastructure and CNG stations have expanded rapidly. Electric vehicles alone grew by 64% year-on-year, with over 1.2 million units sold in the last fiscal year. Hybrid vehicles also saw a surge, climbing 38% to 890,000 units, while CNG-powered cars rose 22% to 1.5 million units. In contrast, petrol car sales declined by 9% to 2.1 million units, reflecting a structural shift rather than a temporary blip.

Industry analysts attribute this change to a combination of factors, including the central government's Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, which has subsidised electric two-wheelers and cars. Additionally, state-level policies in Delhi, Maharashtra, and Karnataka have offered road tax exemptions and priority parking for green vehicles. "The consumer is increasingly looking at total cost of ownership, and alternative fuel vehicles are now competitive on that front," says an analyst at a leading consulting firm.

However, challenges remain. The report notes that charging infrastructure is still concentrated in metropolitan areas, with rural regions lagging. Battery costs, though falling, still account for nearly 40% of an EV's price. Furthermore, the resale value of petrol cars has historically been higher, but that gap is narrowing as demand for used electric vehicles grows. Despite these hurdles, the momentum is expected to continue, with SIAM projecting that alternative fuel vehicles will capture 60% of the market by 2030.

The table above illustrates the sales volumes for the fiscal year 2025-26, with CNG leading among alternative fuels due to its lower operational costs and widespread availability. Notably, the combined alternative fuel sales total 3.59 million units, surpassing petrol's 2.1 million, a margin of 1.49 million units. This crossover was not anticipated by many market watchers, who had predicted it would occur by 2028 at the earliest.

"This is a watershed moment for India's auto industry. The shift to alternative fuels is not just a trend but a fundamental change in how Indians view mobility." — An industry expert, speaking on condition of anonymity.

Looking ahead, automakers are responding by expanding their green portfolios. Maruti Suzuki, Hyundai, and Tata Motors have announced plans to launch multiple electric and hybrid models over the next two years. Meanwhile, oil marketing companies are investing in expanding CNG networks, with a target of adding 10,000 new stations by 2027. The government's Production Linked Incentive (PLI) scheme for advanced chemistry cells is also expected to boost local battery manufacturing, reducing costs further.

For consumers, the choice is becoming clearer: alternative fuel vehicles offer lower running costs, reduced emissions, and increasingly, comparable performance. As one Mumbai-based car owner noted, "I switched to an EV for my daily commute, and my monthly fuel bill has halved." With such tangible benefits, the trend is likely to accelerate, reshaping India's roads and its energy landscape for years to come.

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