Are EVs, CNG Taking Over?

EVs, CNG Gain Ground As Indian Buyers Chase Lower Running Costs

By Shubhangi Bhatia

What?

For the first time, alternate fuel vehicles including CNG, hybrids and electric vehicles (EVs) combined crossed 40% of India's passenger vehicle sales in June, hitting 40.35%, up from around 35% a year ago. CNG alone made up 24.33% of sales, hybrids 8.27%, and EVs 7.75%.

Maruti Suzuki recorded its highest-ever CNG sales for the quarter, while Tata Motors posted its best-ever monthly EV numbers, with volumes nearly tripling year-on-year.

For Ahmedabad-based Manan Choksi, whose household now runs three alternate fuel cars, the shift was obvious. He doesn't want his family's mobility tied to factors outside his control, like the price of crude oil in a given month.

The immediate trigger was fuel price volatility linked to tensions in West Asia, which pushed buyers across the industry to reconsider running costs. Automakers responded by leaning harder into their alternate fuel lineups.

"As (fuel) prices started going up, we strategically increased our supply of CNG vehicles in the market," said Partho Banerjee, Maruti's executive director of marketing & sales, describing it as part of a broader industry hedge against fuel volatility.

Why It Matters

Analysts caution against reading this purely as a fuel price story. The shift is structural, with a widening CNG infrastructure, falling EV ownership costs, and buyers increasingly doing five-year cost math instead of just comparing showroom prices.

"CNG appears well placed to maintain its momentum, given its affordability, infrastructure readiness and existing scale," Poonam Upadhyay of Crisil Ratings told The Core, noting that CNG and EVs now offer the most competitive total ownership costs in the market.

Choksi backs this with his own numbers. His Nexon has cost him nearly 70% less to maintain over five years, a saving that made the case for him, fuel prices aside.

What’s Next?

The real test lies ahead. Incoming fuel efficiency emission norms from April 2027 are pushing automakers toward cleaner fleets regardless of which technology they bet on, and Federation of Automobile Dealers Association (FADA) President CS Vigneshwar projects alternate fuel vehicles could touch 50% of sales within two to three years.

ICRA also expects the segment to keep expanding over the next three to four years.

But there's a catch. How much of June's surge was a genuine structural shift, and how much was a reaction to a temporary fuel price shock? As he put it, "The industry needs to watch whether this is a temporary, reactionary shift in customer behaviour or whether this growth is here to stay."

So is this a genuine shift in what Indian buyers value, or a trend that only holds as long as the geopolitical tensions and fuel prices stay in the headlines?

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12%

That's how much domestic air traffic fell in June on a monthly basis, dropping to 13.5 million passengers from 15.3 million in May, according to DGCA data.

The decline came as surging fuel costs and capacity cuts, triggered by the West Asia conflict, pushed fares higher and kept travellers away.

Fast Facts: IndiGo held its ground with a 66.3% market share in June, up from 64.9% in May, while Air India Group slipped to 23.9% from 25.6%. Akasa Air edged up to 6.4% from 5.8%, and SpiceJet continued to lose ground, falling to 1.9%.

For the first half of 2026, airlines carried 864 lakh passengers, a modest 1.44% rise over the same period last year.

As reported by The Core, the West Asia conflict drove aviation turbine fuel prices sharply higher, forcing Air India to cut international capacity by 22% on select routes and IndiGo by 17%.

With ATF making up 40–50% of Indian carriers' costs — nearly double the global average — airlines passed on higher costs to passengers, with fares rising as much as 50% on key metro routes.

Future: Recovery is already underway. May traffic bounced back 10% month-on-month, and analysts expect the trend to hold as fuel costs ease and flight schedules normalise.

Airlines are also using lower fares to lock in forward bookings ahead of the festive and winter travel season.

Paper Leak Reckoning

Youth-led Cockroach Janta Party protesters reclaimed the Jantar Mantar site in Delhi and vowed to continue their sit-in until Education Minister Dharmendra Pradhan resigns.

Setup: Nearly 500 supporters gathered under tight security after Monday’s clashes injured around 180 people, including 118 police personnel, according to Delhi Police.

Flashpoint: Prime Minister Narendra Modi addressed the NEET controversy for the first time at the NDA Parliamentary Party meeting at the Parliament Annexe, calling for a foolproof public examination system.

He said authorities had arrested 13 suspects in the paper leak case and successfully conducted the re-test, according to Union Parliamentary Affairs Minister Kiren Rijiju.

Rahul Gandhi and Priyanka Gandhi Vadra were detained after leading a Congress protest outside Modi's residence, with video footage showing Rahul Gandhi resisting the police as officers carried him away.

Meanwhile, the Delhi High Court allowed activist Sonam Wangchuk to shift to a private hospital. CJP founder Abhijeet Dipke apologised to women protestors who were injured during Monday's clashes and vowed to continue the sit-in at Jantar Mantar, while ruling out another march to Parliament for now to avoid further violence.

India Halts Iraqi Oil

Indian state refiners Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals Limited (MRPL) have cancelled plans to lift Iraqi crude from Basrah, citing escalating risks in the Strait of Hormuz, Reuters reported.

IOC scrapped a 2-million-barrel lifting aboard very large crude carrier Lila Jamnagar, while MRPL halted its Aframax shipment. India has also warned shipowners against deploying Indian seafarers on vessels transiting the strait.

Context: The move follows a sharp escalation in the West Asia conflict. US forces reportedly struck targets across Iran after President Trump vowed retaliation for American troop deaths, prompting Iranian strikes on US-linked sites in Bahrain, Kuwait and Jordan. A tanker was hit in the Strait of Hormuz, and Yemen's Iran-aligned Houthis threatened a naval blockade of Saudi Arabia, raising fears for roughly a fifth of global oil flows.

Setup: Despite the turmoil, Brent crude rose only modestly, up 1.8% to $90.84, as reports of a mediator-proposed 10-day ceasefire tempered market fears.

India Plans to Ease Export Rules

India's trade regulator is proposing to exempt low-value export shipments worth up to Rs 10,000 from a key registration requirement, aimed at reducing paperwork for small businesses, artisans and ecommerce sellers.

Context: The Directorate General of Foreign Trade (DGFT) has proposed exempting consignments with a free-on-board value of up to ₹10,000 from the requirement of obtaining a Registration-Cum-Membership Certificate (RCMC) when applying for authorisations or claiming benefits under the Foreign Trade Policy 2023.

The proposal, issued via a trade notice on July 20, is open for stakeholder feedback for 10 days. The exemption will not apply to products classified as restricted under India's ITC (HS) schedule.

An RCMC is issued by Export Promotion Councils and serves as proof that an exporter is registered with the relevant trade body, a requirement that has historically added a compliance layer for small and first-time exporters.

The Shift: DGFT described the move as a de minimis exemption, a standard global trade practice where minor transactions are exempt from full regulatory compliance.

It is part of a broader government effort to bring more small sellers and artisans into formal export channels, particularly through post offices and courier services.

Steel's Double Squeeze

Indian steelmakers are turning to the domestic market to offset shrinking exports, as the EU and UK tighten steel import rules. Executives expect shipments to both markets to fall up to 40% this fiscal year, after the EU imposed new duty-free quotas under its carbon border mechanism and Britain cut its own tariff-free allowances from July, Reuters reported.

Critical Moment: The pivot faces a hurdle. Chinese steel, priced $52-63 per ton cheaper, is undercutting Indian mills absorbing diverted output.

India has launched an anti-dumping probe into Chinese, Japanese and Russian hot-rolled steel, and industry executives are pressing for tighter import curbs.

The Lead: Despite the squeeze, India remains a rare bright spot of strong steel demand, driven by infrastructure spending. Tata Steel and JSW Steel continue investing domestically, though margins are not expected to improve without higher import duties.

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