India is Gradually Moving towards Alternative Fuel Vehicles


• 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.

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