CNG, hybrid and electric cars close in on petrol amid growing uncertainty around E20

Consumer uncertainty over E20, petrol blended with 20% ethanol, is pushing many buyers toward passenger vehicles powered by alternative fuels. Sales of alternative fuel-powered passenger vehicles, including CNG, hybrid and electric cars, came within striking distance of petrol cars in July 2026, revealed the Federation of Automobile Dealers Associations (FADA).

The alternative fuel-powered passenger vehicles accounted for 40.59% of total PV retail sales in July 2026, which means these vehicles were just 1.09% behind the share of petrol-powered vehicles at 41.68%. Overall passenger vehicle retail sales in India rose 19.1% year-on-year (YoY) to 416,555 units in July, helped by tax-cut-led demand and new model launches.

According to the apex automobile dealers' body, this shift towards alternative fuel-run PVs came amid concerns surrounding the rollout of E20 around the country as standard petrol. The mandatory rollout of E20 replaced the earlier E10 petrol. This transition has drawn criticism from a large number of consumers, who say the higher ethanol blend affects fuel efficiency and vehicle performance, particularly in older vehicles that are not designed for E20 petrol.

Speaking on this shift towards alternative fuel-powered passenger vehicles, Sai Giridhar, Vice President of FADA, told Reuters that this is more consumer queries than complaints. However, he also added that dealers have not received a single complaint linking vehicle issues to E20 fuel despite servicing thousands of models every month.

Giridhar stated that the share of petrol-powered passenger vehicle sales fell to about 41% in July 2026 from 47.6% recorded a year earlier, while diesel-run passenger vehicles' share remained largely unchanged at about 18%. As petrol-run PVs' share declined, CNG and electric cars gained ground. CNG-powered cars' share rose to about 24% last month from 21% registered a year earlier, while electric cars accounted for nearly 8% of sales in July this year, up from about 5% recorded in the same month a year ago.

The electric passenger vehicles registered an 83% (Yoy) growth last month over the same month a year ago, maintaining a market share of 7.9% in July 2026, unchanged from June 2026, but higher than the 5.1% recorded in July 2025.

FADA has also revealed dealer surveys suggest some consumers are delaying purchases of petrol vehicles or exploring alternative-fuel options because of concerns around E20, its impact on fuel economy and vehicle compatibility. The dealer body has also said that while passenger vehicles entered August with healthy pipelines and fresh launches, clearer communication around the E20 rollout could help convert hesitant buyers.

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