Sales of CNG cars grew 46% year on year during January-August followed by hybrids at 19% while electric vehicles managed only a 7% growth, data collated by Jato Dynamics showed.
Launch of new vehicles mirrored this trend with more models in the CNG segment hitting the roads in the first eight months of the calendar, followed by hybrids and electric, the data showed.
Overall car sales in the country grew by 6% to 2.87 million units during this period.
Carmakers such as Tata Motors and MG Motor have cut prices, introduced more financing options and adopted battery-as-a-service models along with free charging offers to stimulate the EV market, but the segment continues to face challenges in mass adoption due to infrastructure challenges and comparatively high initial acquisition cost.
While the Centre had targeted EVs to account for 30% of auto sales in India by 2030, it seems to be taking its foot off the gas and encouraging other clean fuels.
Union road transport and highways minister Nitin Gadkari recently said EV prices are now competitive enough to warrant no further hike in subsidies, and encouraged consumers to explore alternative fuel options instead of relying solely on EVs. Carmakers are offering more choices, including CNG, strong hybrids, electric, and traditional fuel types like petrol and diesel to meet evolving consumer preferences.
Maruti Suzuki sold 48,000 S-CNG cars in August, and targets 600,000 plus CNG sales this fiscal. "We are aiming to sell 50,000 S-CNG cars per month with the launch of the Swift S-CNG," said Partho Banerjee, senior executive director, marketing and sales, at Maruti Suzuki.
High Acquisition Cost
In FY24, the country’s largest car maker sold 489,000 CNG cars, accounting for 26% of its total sales. This year, one out of every three vehicles it sold has been a S-CNG vehicle. “We are making strategic marketing tie-ups with 34 distributors to expand the gas stations and promote CNG vehicles in those new markets,” Banerjee said.
CNG’s rapid growth is tied to its adoption by the gig economy and small businesses who rely on this fuel type for its cost-efficiency and practicality, experts said.
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, said Ravi Bhatia , president of Jato Dynamics.
Hybrids are appealing to consumers seeking the best of both worlds — lower emissions and improved fuel economy without committing entirely to electric.
EV makers are trying to catch up. JSW MG Motor last week launched its third electric vehicle, the Windsor crossover.
It hopes that lowering the acquisition cost through the battery rental model will attract more buyers to the EV market and help the company to gain 50% share in the EV market.
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