Decoding the transition to alternative fuels, Pg7

Key Highlights:

• August 2026 marked a "historic fuel crossover" in India's passenger vehicle segment, according to Federation of Automobile Dealers Associations (FADA) data.
• For the first time, alternative fuels accounted for 41.95% of new passenger vehicle registrations, surpassing petrol vehicles at 40.85%.
• Alternative fuels include Compressed Natural Gas (CNG), hybrid, and electric vehicles.
• Overall, petrol and diesel vehicles still dominate the market with 83.5% of registrations from January to March 2026, a drop from 95% in 2021.
• Electric Vehicle (EV) adoption is significantly higher in two-wheelers (9.1% in 2026) and three-wheelers (60.5% in 2026).

Detailed Insights:

• The overall reduction in the share of petrol and diesel vehicles is largely driven by the increasing adoption of Electric Vehicles (EVs) in the two and three-wheeler categories.
• The two-wheeler segment, which constitutes over 70% of new vehicle registrations, saw its EV share rise from 6.4% in 2025 to 9.1% in 2026.
• Three-wheelers have shown the most rapid transition, with 60.5% of new registrations being Electric Vehicles (EVs) by August 2026.
• In the car segment, the shift towards "alternative fuels" is primarily attributed to vehicles running on Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG), and hybrid technologies, rather than pure Electric Vehicles (EVs).
• The share of petrol and diesel cars decreased from 86% in 2021 to 61.6% in 2026, largely due to the rise of hybrid and CNG/LPG vehicles.
• There is a recognized need to enhance charging infrastructure to accelerate the pace of Electric Vehicle (EV) adoption specifically within the car segment.
• Granular data for vehicle sub-categories is accessed from the Vahan portal.

Key Concepts Involved:

• Alternative Fuels: Non-conventional energy sources used in vehicles, such as Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG), electricity, and hybrid systems.
• Electric Vehicles (EVs): Automobiles propelled by electric motors, drawing power from rechargeable battery packs.
• Compressed Natural Gas (CNG): A fossil fuel alternative to gasoline, known for its lower emissions and cost-effectiveness.
• Hybrid Vehicles: Vehicles that combine a conventional internal combustion engine with an electric motor and battery to improve fuel efficiency.