CNG, hybrid vehicles are outperforming EVs in India
What's the story
The Indian automotive market is witnessing a surge in the popularity of CNG and hybrid vehicles, surpassing electric cars.
According to data from Jato Dynamics, sales of CNG cars have seen a significant 46% increase from January to August this year.
During the same period, hybrid vehicle sales also rose by 19%, while electric vehicles (EVs) experienced a comparatively modest growth of just 7%.
Market dynamics
New launches reflect market trend
The launch of new vehicles in India has mirrored this trend, with more models in the CNG segment being introduced than hybrids or electric cars.
Despite efforts by manufacturers like Tata Motors and MG Motor to stimulate the EV market through price reductions, additional financing options, and free charging offers, high initial costs and infrastructure challenges continue to hinder widespread adoption.
Policy shift
Government shifts focus to alternative fuels
The Indian government had initially set a target for EVs to constitute 30% of auto sales by 2030.
However, recent statements from Nitin Gadkari, the Union Minister for Road Transport and Highways, indicate a shift in focus toward other clean fuels.
He stated that EV prices are now competitive enough without further subsidies, and encouraged consumers to consider alternative fuel options instead of relying solely on EVs.
Market leader
Maruti Suzuki leads in CNG car sales
Maruti Suzuki, India's largest car manufacturer, has been a significant player in the CNG market.
The company sold 48,000 S-CNG cars in August alone and aims to reach over 600,000 CNG sales this fiscal year (FY).
In FY24, Maruti Suzuki sold 489,000 CNG cars which accounted for 26% of its total sales.
This year, one out of every three vehicles it sold has been an S-CNG vehicle.
Adoption drivers
CNG's growth linked to gig economy and small businesses
The rapid growth of CNG is attributed to its adoption by the gig economy and small businesses, who value this fuel type for its cost-efficiency and practicality.
Ravi Bhatia, President of Jato Dynamics, noted that with 25 active CNG models in the market and new entrants like the Toyota Rumion and Urban Cruiser Taisor, CNG has become a major player.