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While CNG continues to be highly popular in the Indian car market, the growing adoption of electric and hybrid powertrains is further pushing alternative energy vehicle sales
With consumers increasingly opting for alternative-energy cars to cut their running costs, the market share of these cars is on the rise. Close to 30% of new car sales in FY2026 came from electric, hybrid, and CNG models, says a new report from ET Auto.
Alternative energy vehicles have essentially captured nearly a third of the Indian car market. Close to 13,40,000 units of these eco-friendly models were sold between April 2025 and March 2026, as per data from the government’s VAHAN portal and the Society of Indian Automobile Manufacturers (SIAM). Total car sales in the financial year ended on 31 March stood at approximately 46.7 lakh units, up 13% over FY2025.
Ashim Sharma, senior partner at Nomura Research Institute, said that CNG, hybrid, and electric vehicles are seeing a growth in sales simply based on economics. In the case of EVs, specifically, expansion and improvement of charging infrastructure and a wider selection of models are driving growth, Sharma added. Another important aspect worth noting, brought to light by Tata Motors Passenger Vehicles MD and CEO Shailesh Chandra, is the improving confidence of consumers in the new powertrain technology.
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More than 2 lakh electric cars were sold last fiscal, and 92,000 units of them were made by Tata Motors, Chandra added. This was the first time electric car sales surpassed 2 lakh units in a financial year. That said, electric cars had a small market share of approximately 4% in FY2026, and they will still take some time to become the new norm. CNG cars, on the other hand, are already being sold in high volumes and occupy a significant market share.
Maruti Suzuki is India’s leading brand in the CNG car segment, but Tata Motors is also a significant player. The latter sold 1.7 lakh CNG cars last fiscal, Chandra said. Tata Motors expects demand for CNG and electric models to continue to grow.
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While consumers benefit from lower running costs with their CNG, hybrid, and electric cars, the government will see a reduced dependence on fuel imports. Meanwhile, automakers can now more strongly invest in futuristic clean energy technologies, especially electrified ones. That explains why homegrown brands Tata Motors and Mahindra are doubling down on electric powertrains and rapidly expanding their portfolio of EVs.
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