India's auto retail market extended its electrification trend through August 2026, with alternative fuels — CNG, hybrids and electric vehicles — collectively overtaking petrol in the passenger vehicle segment for the first time, even as overall industry volumes were lifted by improved affordability following recent GST rate cuts and an early festive push from Onam and Raksha Bandhan.
Passenger vehicles
Passenger vehicle retails grew 16% year-on-year to 401,000 units in August. The headline shift was in fuel mix: petrol's share fell to a record low of 41%, down from 46% a year earlier, while CNG rose to a record high of 25% from 21%. Diesel eased slightly to 17%. Taken together, CNG, hybrids and electric vehicles now account for 42% of PV retails — surpassing petrol for the first time, a reversal from a 12-percentage-point deficit just a year ago. Analysts noted that buyer hesitation around the transition to E20 fuel appears to be nudging demand toward CNG, hybrid and electric alternatives.
Within the fuel mix, mild hybrids were the only category to grow sequentially, up 16% month-on-month and 55% year-on-year, lifting their share to 7%. Strong hybrids moved in the opposite direction, down 20% month-on-month and 16% year-on-year, holding a 2% share.
Electric car sales grew 52% year-on-year to 30,700 units, with penetration reaching 7.7%, up from 5.9% a year earlier — though volumes eased 11% from July's record 8.1% penetration, leaving August as the third-best month on record for the category.
Among overall PV manufacturers, Maruti Suzuki strengthened its lead to about 41% share, up from 39% in both July and a year ago. Tata Motors advanced to roughly 14% (from 12% a year ago) on 41% year-on-year growth, while Mahindra & Mahindra eased to about 12% and Hyundai to about 12%, both down from their year-ago levels.
In the electric car space specifically, Tata Motors' share recovered to about 43% — its best reading since December 2025 — helped by the widest EV portfolio in the market and the recent launch of the Tiago EV. JSW MG Motor continued to lose ground, falling to roughly 15% from 28% a year earlier amid rising competition. Mahindra & Mahindra eased to about 21% from 23% in July, while Maruti Suzuki, a new entrant to the segment, reached about 5% share. In CNG passenger vehicles, Maruti Suzuki dominated with roughly 71% share, ahead of Tata Motors (17%) and Hyundai (9%).
Regionally, Delhi recorded the country's highest electric car penetration at around 19% — up sharply from 10% a year ago — though this figure is inflated by fleet registrations tied to a VinFast-supplied all-electric taxi fleet deployed in the Delhi-NCR region since June 2026. Stripping out that fleet, underlying penetration is estimated at 12–14%, still well above the national average of 7.7%. On CNG, the North region posted the highest PV penetration at about 35%, led by Haryana (44%) and Uttar Pradesh (40%), followed by the West and Central regions at around 37%, led by Gujarat (41%) and Maharashtra (39%).
Two-wheelers
Two-wheeler retails climbed 20% year-on-year in August to 1.71 million units, with Onam and Raksha Bandhan providing an early festive lift against a soft base in August 2025. The bulk of the traditional festive calendar, however, still lies ahead in the September–November window this year.
Petrol continued to dominate the category with an 89% share, down marginally from 92% a year earlier, while CNG two-wheelers remained a negligible sliver of the market at roughly 0.1%.
Electric two-wheelers (E2W) told a more nuanced story. Sales jumped 67% year-on-year to 183,000 units, but slipped 11% month-on-month from July's record, as the segment digested a reset in the central e-2W demand incentive scheme. The incentive's terminal date was pushed out to March 2028, but per-kWh support was simultaneously reduced — a change that took effect in mid-August. That followed an earlier 31 July deadline that appears to have pulled forward a chunk of demand into July, inflating that month's numbers and setting up August's sequential dip. Even so, E2W penetration held in double digits at 10.7%, comfortably above last year's 7.7%, if below July's 11.2%.
Legacy manufacturers continue to hold the upper hand in electric two-wheelers, with TVS Motor and Bajaj Auto together commanding roughly 49% of volumes. TVS retained the top spot with about 27% share, helped by a larger battery pack on the base iQube and a special-edition launch late in the month. Bajaj Auto held steady in second place at around 22%, a sharp improvement from just 11% a year ago. Ather Energy moved up to third with roughly 16% share, growing volumes 59% year-on-year on continued demand for its Rizta model, and recently launched the mass-market Konarc, which the company expects will accelerate volumes in coming months. Hero MotoCorp slipped to fourth at around 10%, down from 13% a year earlier. Ola Electric held fifth position at about 8% share — posting the smallest sequential decline among the top six OEMs, yet the only major player to see volumes fall year-on-year, down 27%. Greaves Electric Mobility's Ampere brand rounded out the top six at roughly 5%. Notably, no major OEM grew sequentially in August.
Three-wheelers
Three-wheeler retails rose 9% year-on-year to 122,000 units in August, with overall electric three-wheeler (E3W) penetration climbing to 65% — the second-highest reading in the available monthly data, behind only December 2025. Diesel's share eased slightly to 13%, still above year-ago levels, while CNG penetration continued a steady decline to 21% from 25% a year earlier.
Bajaj Auto remained the largest overall three-wheeler player with about 35% share, though down from 39% a year ago, while Mahindra & Mahindra and TVS Motor both gained ground, rising to roughly 11% and 6% respectively.
The more striking shift came within the L5 sub-segment (a three-wheeler passenger/cargo category), where electric penetration rose to 51% in August — up from 48% in July and just 33% a year earlier, marking the first month EVs have taken more than half of L5 retails in the available data series. This acceleration has continued even after the central L5 electric incentive under the PM E-DRIVE scheme was closed in December 2025 upon meeting its targets.
Within electric L5, Bajaj Auto reclaimed the leadership position with about 30% share, edging ahead of Mahindra & Mahindra's 27%, having trailed the latter through June and July. Mahindra's electric L5 share has slid from 37% a year ago. TVS Motor's share has been steady at 10–11% over the past year. Notably, Bajaj's dominant 48% share of the overall (EV plus ICE) L5 market dwarfs its 30% share of the electric-only segment — a gap that points to potential market-share dilution risk for the company as electrification in L5 continues to accelerate.
Commercial vehicles
In the Light and Medium Duty Truck (LMDT) segment, retails grew 21% year-on-year, with diesel still dominant at roughly 78% and CNG steady at about 16%. Electric LMD trucks remain a small niche but reached record penetration of 5.1% in August, up from 4.5% in July and just 2.3% a year earlier, with volumes up 172% year-on-year. Tata Motors extended its lead in this segment to about 47% share, while Mahindra & Mahindra's share halved year-on-year to around 12%.
The bus segment saw overall retails fall 12% year-on-year, with diesel still holding roughly 81% share. But electric buses were a bright spot: August retails of 910 units marked the highest monthly tally on record, up 126% year-on-year and 57% month-on-month, pushing electric bus penetration to 8%, from 4% in July and 3% a year ago. Calendar-year-to-date electric bus volumes have already surpassed the whole of calendar 2025.
The electric bus market remains fragmented and volatile, driven largely by lumpy government tenders and uneven delivery schedules. On a calendar-year-to-date basis, Switch Mobility (22%), Olectra Greentech (18%) and PMI Electro Mobility (17%) hold broadly similar leading shares, with unlisted players collectively accounting for about 41%. Tata Motors, the segment's dominant player in calendar 2024 with a 38% share, has seen its position collapse to just 2% year-to-date in 2026. In August alone, Olectra led named players with about 35% share, ahead of Switch Mobility (16%) and PMI Electro Mobility (6%).