One in four sold in India now runs on CNG or electric powertrains, signalling a steady shift in the passenger vehicle market towards alternative fuels, according to data from the Federation of Automobile Dealers Associations (FADA).
Combined CNG and sales stood at about 12.3 lakh units in FY26, translating to a 26 per cent share of the passenger vehicle market, up from roughly 22 per cent a year earlier. This compares with overall passenger vehicle growth of about 13 per cent during the year, indicating that these segments are expanding faster than the broader market..
When hybrid vehicles are included, the shift becomes even more pronounced. Of the roughly 47lakh passenger vehicles sold in India in FY26, about 16 lakh were powered by CNG, electric or hybrid technologies, taking the combined share to over one-third of the market.
However, hybrids occupy a different position in this transition. Unlike CNG and electric vehicles, they are not zero-emission solutions but serve as a fuel-efficiency bridge, with their share remaining relatively stable at about 8 per cent of the market
The share of alternative powertrains is expected to rise further. FADA President C S Vigneshwar said the combined share of CNG, electric and hybrid vehicles could increase to 40–42 per cent of passenger vehicle sales in the coming year, driven by expanding product options, rising fuel costs and continued policy support. “The shift towards cleaner and more efficient fuels is becoming a structural trend, supported by both consumer economics and policy direction,” he said.
CNG-powered vehicles accounted for 21.98 per cent of passenger vehicle retail sales in FY26, up from 19.60 per cent a year earlier—an increase of 2.38 percentage points. In volume terms, this translates to about 10.3 lakh units in FY26, compared with roughly 8.2 lakh units in FY25, reflecting a steady expansion in adoption
Electric vehicles, while still a smaller share of the market, are growing much faster. Their share rose to 4.25 per cent in FY26 from 2.61 per cent a year ago—equivalent to around 2.0 lakh units, up from about 1.1 lakh units in FY25, effectively doubling within a year.
The divergence shows how India’s shift away from conventional fuels is unfolding along different timelines. While CNG continues to drive current volumes, EVs are expanding rapidly from a low base, pointing to a market balancing immediate cost considerations with a gradual move towards electrification.
For consumers, particularly in price-sensitive segments, CNG continues to offer a compelling value proposition. Lower running costs compared with petrol vehicles and relatively modest upfront premiums versus EVs have made it an accessible alternative, especially as automakers expand factory-fitted CNG options across entry and mid-level models.
The CNG push is being led by mass-market manufacturers, with Maruti Suzuki—India’s largest carmaker—anchoring the segment through models such as the WagonR, Dzire, Ertiga and Brezza. Hyundai’s Aura and Grand i10 Nios and ’ Tiago, Tigor and Punch CNG have also seen steady traction.
On the electric side, the market remains more concentrated, led by Tata Motors through models such as the Nexon EV, Tiago EV, and Punch EV. MG Motor’s Comet EV has also gained traction in urban markets, while premium offerings such as the Harrier EV or Mahindra BE5 have also appealed to higher-end buyers.
At the same time, the broader fuel mix is recalibrating. Petrol vehicles accounted for about 47.48 per cent of sales in FY26, down from 50.82 per cent a year earlier, while diesel remained stable at around 18 per cent, indicating a gradual move away from pure internal combustion engines, FADA said in their advisory
FADA said FY26 marked a record year for India’s auto retail industry, with total vehicle sales crossing 2.96 crore units, reflecting broad-based demand across segments.
“This is not just a number—it represents the industry approaching a scale that would have seemed distant just a few years ago,” Vigneshwar said, adding that the growth was supported by improving affordability, expanding mobility demand, and a diversifying powertrain mix.