VIDEO: India's Fuel Mix Is Shifting — Petrol Losing Ground as CNG and EVs Gain Share

India's passenger vehicle market is undergoing a measurable shift in fuel preferences, one that has accelerated over the past three years and shows no sign of reversal. Autocar India has taken up the subject in the latest episode of its Deep Drive Podcast, published on 25 April 2026. Hosted by editor Hormazd Sorabjee, the episode examines the decline of petrol, the future of diesel, the rise of CNG and EVs, and the forces shaping these changes across the Indian automotive landscape.

The data underpinning this conversation is significant. Petrol is the only powertrain type to have lost market share in 2025, with its share dropping from 59.4 percent to 53.3 percent, even as overall passenger vehicle sales rose to an estimated 45.8 lakh units — roughly 6 percent higher than the previous year.

The trend has continued into FY2026: CNG has become the second most popular fuel type in India's passenger vehicle market, with its share rising to 21.98 percent, up from 19.60 percent in FY2025. Diesel, by comparison, accounted for 18.08 percent of sales, while EVs made up 4.25 percent. Petrol continued to lead, but its share declined further to 47.48 percent.

In absolute terms, the scale of the CNG surge is notable. Of the approximately 47 lakh passenger vehicles sold in FY2026, around 10.34 lakh units were CNG models — meaning nearly one in four cars sold in the country now runs on compressed natural gas. CNG adoption has grown from around 12–13 percent three years ago to nearly 22 percent today. The primary driver has been economics: CNG typically costs 40–50 percent less than petrol per kilometre, while the price premium for factory-fitted CNG variants over petrol has hovered around ₹80,000–1 lakh.

The broader picture shows alternative fuels collectively reaching a threshold. In FY2026, cars powered by electricity, CNG, and hybrid systems together crossed 13.4 lakh units, accounting for nearly 30 percent of the total 46.83 lakh passenger vehicles sold in the country — meaning roughly one in every three new cars now runs on something other than pure petrol or diesel.

Diesel, long considered in decline, has shown resilience in specific segments. Despite concerns over long-term viability, the market share of diesel cars edged up to 18.3 percent in 2025, supported mainly by demand for SUVs. While many brands have reduced diesel options in smaller cars, the fuel type remains common in midsize and ladder-frame SUVs, with Mahindra's diesel range — including the Thar, Scorpio N, Bolero, and XUV models — among the key contributors.

On the policy and infrastructure side, several factors are accelerating the transition. From 947 CNG stations in 2014, India now has over 6,000 — a fivefold increase in a decade, extending coverage into Tier 2 and Tier 3 cities. For EVs, government incentives for buyers, a wider range of models from entry-level hatchbacks to premium SUVs, and improved charging infrastructure have all supported sustained growth in battery-powered vehicle sales.

Industry observers note that the shift reflects both consumer behaviour and manufacturer strategy. For OEMs and dealers, the trend reinforces the need for multi-fuel portfolios and infrastructure-ready retail strategies. For policymakers, it highlights the importance of balanced support across charging and CNG refuelling ecosystems.

The Autocar India Deep Drive Podcast episode situates these developments within a longer arc of change, asking not only what has already shifted, but what is shaping the market going forward. The episode forms part of an ongoing series that has previously covered topics including FY26 car and two-wheeler sales, platform strategies among global carmakers, and manufacturer-specific market approaches.

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