Cleaner-Fuel Vehicles Surpass Petrol Sales for First Time in India

New Delhi: The shift towards cleaner-fuel vehicles is gaining momentum in India, with CNG, hybrid and electric vehicles together accounting for 42 per cent of passenger vehicle sales in August, "surpassing petrol for the first time," according to a report by Equirus Securities.

As per the report, passenger vehicle (PV) retail sales grew 16 per cent YoY in Aug'26, supported by improved affordability following GST rate cuts.

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"Petrol share declined to a record low of 41 per cent, while CNG rose to a record high of 25 per cent, taking the combined share of CNG, hybrid and EVs to 42 per cent- ahead of petrol for the first time," it noted.

The passenger vehicle (PV) fuel mix continued to shift away from petrol in August 2026, with petrol's share falling to a record low of 41 per cent, from 46 per cent a year earlier. Meanwhile, compressed natural gas (CNG) gained ground, rising to 25 per cent from 21 per cent.

At the same time, electric car sales rose 52 per cent year-on-year to 30,700 units in August, taking EV penetration to 7.7 per cent, up from 5.9 per cent in August 2025, although it eased from 8.1 per cent in July 2026.

"Buyer hesitation around the E20 transition appears to have supported the shift towards CNG, hybrids and EVs," the report stated.

Tata Motors' electric vehicle share recovered to around 43 per cent in August 2026, its highest level since December 2025, compared with around 42 per cent in July 2026 and 41 per cent in August 2025. The recovery was supported by the company's broad electric vehicle portfolio and the recent launch of the Tiago EV.

In contrast, JSW MG Motor's share declined to around 15 per cent from 28 per cent in August 2025 amid increasing competition. Mahindra & Mahindra's share also eased to around 21 per cent in August from 23 per cent in July, while Maruti Suzuki captured around 5 per cent of the electric vehicle market following its entry into the segment.

Delhi recorded the highest electric car penetration in the country during the month.

"Regionally, Delhi recorded the highest electric car penetration at ~19 per cent in Aug'26, although this was inflated by fleet registrations; excluding the VinFast-supplied taxi fleet registrations, we estimate underlying penetration at ~12-14 per cent, still well above the national 7.7 per cent penetration," it said.