Synopsis
• Demand for vehicles powered by traditional fuels such as petrol and diesel is progressively shifting towards those that utilize alternative fuels. The share of petrol vehicle sales, as a percentage of total vehicle sales (includes Passenger Vehicles, Commercial Vehicles, two and three-wheelers), has recorded a significant decline, decreasing from 86% in 2020 to 76% in 2023 while for diesel vehicles it has slightly decreased from 12% in 2020 to 11% in 2023.
• EVs, CNG, LPG, and hybrids are gaining popularity; however, the inadequacy of charging/fueling infrastructure remains a significant barrier, despite some advancements.
• At present, EVs offer the lowest lifetime cost, followed by CNG.
• The future of India’s mixed-fuel automotive market will be determined by government policies, infrastructure development, and consumer preferences.
India’s Auto Revolution Underway
The Indian automotive market, based on fuel type, is undergoing a fascinating revolution as India grapples with rising air pollution and its commitment to reducing greenhouse gas emissions, the need for cleaner and more sustainable transportation solutions has become increasingly crucial. While petrol and diesel have dominated the Indian automotive scene for decades, a wave of alternative fuel options is emerging, offering both environmental and economic benefits.
In recent years, there has been a notable shift towards exploring alternative fuel options that are both eco-friendly and economically viable as seen from the chart below where the share of traditional fuel-based vehicle sales volume is changing.