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The month of August was again a strong month for India’s passenger vehicle market. It is interesting because, despite the rising concerns around E20 petrol and high fuel prices, passenger vehicle retail sales have increased 16 per cent year-on-year to around 4.01 lakh units during the month. However, the bigger change which has been seen is in the type of powertrains buyers are now choosing. It has been noted that the sales of CNG, hybrids and electric vehicles together now account for 42 per cent of sales and have overtaken petrol for the first time.

As highlighted above, CNG was the biggest contributor to the change in fuel preference during August. With a 25 per cent share, roughly one in every four new passenger vehicles registered in the country during the month was powered by CNG. Based on total retail sales of around 4.01 lakh units, this translates to roughly one lakh CNG vehicle registrations in a single month.

The growth of CNG is also very significant because the fuel was earlier largely associated with taxis and smaller hatchbacks. However, it is now available across a number of segments, including hatchbacks, sedans and SUVs. Maruti Suzuki offers CNG versions of models such as the Alto, Wagon R, Celerio, Swift, Dzire, Baleno, Fronx, Brezza, Ertiga and Grand Vitara, depending on the variant and current line-up.

Speaking of Maruti Suzuki, the company currently dominates the CNG passenger vehicle market. It accounts for around 71 per cent of CNG sales in August. The second position is held by Tata Motors with around 17 per cent. Meanwhile, Hyundai accounts for around 9 per cent at third position. The wide availability of CNG across Maruti’s product range has helped the company maintain the major lead in this segment.

Tata Motors has also expanded its CNG portfolio and has addressed one of the biggest drawbacks of CNG cars with its twin-cylinder technology. The system uses two smaller cylinders positioned beneath the boot floor instead of one large cylinder. This helps in saving more luggage space. Hyundai has also adopted a similar twin-cylinder layout on selected models.

One of the biggest reasons behind the shift to CNG is the running cost. A factory-fitted CNG car generally costs more to purchase than its equivalent petrol version. But the lower fuel cost per kilometre can help recover the additional upfront cost for customers who drive regularly.

CNG also offers a familiar ownership experience. This is because it still uses an internal-combustion engine and does not require home charging. However, it does have some limitations. CNG filling stations are still not as easily available as petrol pumps, and refuelling can take longer, and queues can be an issue in some cities. CNG versions can also produce less power than their petrol counterparts. Also, the additional equipment can add weight and affect boot space on some cars.

The broader shift has become a lot clearer as CNG, hybrids and EVs are considered together. These three powertrain types accounted for 42 per cent of passenger vehicle retail sales in August. Combined, these three powertrains have managed to move ahead of petrol at 41 per cent. Just a year ago, petrol held a 12 percentage-point lead over the combined share of CNG, hybrid and electric vehicles.

CNG accounted for 25 per cent, mild hybrids around 7 per cent, strong hybrids around 2 per cent and EVs 7.7 per cent. Diesel, on the other hand, accounted for around 17 per cent. This means that the traditional petrol-powered car is no longer the majority choice when the market is viewed in terms of overall powertrain preference.

As for the electric vehicles, they have also continued to gain ground in August. EV sales have increased 52 per cent year-on-year to around 30,700 units. This has taken electric passenger vehicle penetration to 7.7 per cent compared with 5.9 per cent in August 2025. However, EV penetration was slightly lower than the 8.1 per cent recorded in July 2026.

Tata Motors has now strengthened its position in the electric passenger vehicle market as it holds 43 per cent in August. This was higher than its 42 per cent share in July and 41 per cent in August 2025 and was its highest share since December last year. The recovery has been credited to Tata’s larger EV portfolio and the recent launch of the Tiago.ev and Punch.ev.

JSW MG Motor’s EV market share, meanwhile, fell to around 15 per cent from 28 per cent a year earlier due to increasing competition. Mahindra Automotive accounted for around 21 per cent, compared with 23 per cent in July. Meanwhile, Maruti Suzuki has managed to capture around 5 per cent of the electric passenger vehicle market after recently entering the segment with eVitara.

Delhi recorded the highest electric car penetration in India during August at around 19 per cent. However, this figure was partly inflated by fleet registrations involving taxis supplied by VinFast. Excluding these registrations, Equirus Securities estimated Delhi’s underlying EV penetration at around 12-14 per cent, which is still significantly higher than the national figure of 7.7 per cent.

The regional data also shows how important infrastructure is for alternative powertrains. CNG penetration reached around 44 per cent in Haryana, 41 per cent in Gujarat, 40 per cent in Uttar Pradesh and 39 per cent in Maharashtra. The higher adoption in these markets indicates that the availability of CNG infrastructure has a direct role in consumer preference.

Now, even though there is a big shift which is taking place in terms of fuel preference, the overall car demand is still very strong. Maruti Suzuki recorded domestic sales of 176,971 units in August, up 34.8 per cent year-on-year. Meanwhile, Tata Motors and Mahindra recorded growth of 59.1 per cent and 50.4 per cent, respectively. Hyundai also recorded its highest-ever August domestic sales at 54,396 units, up 23.6 per cent.

The passenger vehicle market is currently not showing any signs of a major slowdown because of E20 concerns. Instead, the August numbers suggest that buyers could be changing what they purchase. The coming months, however, will show whether this trend continues or not. As for now, it seems like Indian buyers are now making a big shift from petrol cars.

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