Manan Gautam Choksi's driveway in Ahmedabad tells its own version of India's fuel transition. The Chartered Accountant and educator, who leads a group of multiple schools across the city, bought his first electric vehicle (EV), a Tata Nexon, back in 2022.

Two more of his family's cars have since followed the same path. When his Honda City reached the end of its life eight months ago, he replaced it with a Tata Harrier EV.

Last week, when his wife's ageing Hyundai Venue needed retiring, she swapped it for a Tata Sierra, one of the newest EVs on the market. His father, meanwhile, owns a Lexus ES hybrid, which Choksi borrows whenever he needs to drive long distance between cities.

The recent volatility in fuel prices, driven by the crisis in West Asia, has only reinforced his thinking. Choksi said he doesn't want his family's mobility tied to factors outside his control, like the price of crude oil in a given month, one more reason, on top of the running cost savings, to lean further into EVs.

Choksi's household is, in some ways, a rare case as three alternate fuel cars, home charging, solar panels and a hybrid on standby isn't a bundle most Indian buyers can put together. But the calculation underlying his decisions, namely the upfront cost versus running cost, weighed over years rather than months, is the one now playing out across the country.

A Sudden Spike

The numbers back it up. In June, the combined share of CNG, hybrid and EVs crossed 40% of passenger vehicle sales for the first time at 40.35%, up from roughly 35% a year earlier. CNG alone accounted for 24.33% of sales, hybrids for 8.27%, and EVs for 7.75%, as per data from the Federation of Automobile Dealers Associations (FADA).

The timing is not a coincidence. Fuel prices have also climbed in recent months in the wake of geopolitical tensions in West Asia, and dealerships say the effect was immediate.

Maruti Suzuki, India's largest carmaker, saw CNG penetration across domestic sales rise to 41% in the April-June quarter. "This is the quarter in which we have done our highest-ever CNG sales, with penetration up almost 5% year-on-year," said Partho Banerjee, Maruti's executive director of marketing & sales, on a media call.

"As (fuel) prices started going up, we strategically increased our supply of CNG vehicles in the market. As a result, we recorded our highest-ever CNG sales in the history of Maruti," Banerjee said, adding that the company is trying to hedge against fuel price volatility, since CNG's running cost is much cheaper.

Analysts see a more nuanced picture. June's record sits on top of a trend that's been building for years. The real question isn't whether costlier fuel pushed buyers to switch, but whether they'll stick with that choice once fuel prices settle down.

"The industry needs to watch whether this is a temporary, reactionary shift in customer behaviour or whether this growth is here to stay," FADA President CS Vigneshwar told The Core.

The Math Behind

CNG's advantage isn't about the sudden fuel spike, but structural. "CNG appears well placed to maintain its momentum, given its affordability, infrastructure readiness and existing scale," said Poonam Upadhyay, Director at Crisil Ratings.

Its share of passenger vehicle registrations rose from 11% in FY24 to 18% in FY26, with registrations crossing 7.9 lakh units last fiscal year, growth she attributes to a widespread refuelling network, lower running costs and availability across vehicle segments, not to any single price shock.

From a pure ownership-economics standpoint, Upadhyay told The Core, CNG and EVs offer the most competitive cost, albeit for different buyer profiles.

CNG wins on lower upfront cost and cheap running expenses, while EVs win on energy and maintenance costs, particularly for owners who can charge at home.

Crisil Ratings' estimates, shared with The Core, are illustrative and not for a specific model or location. They are based on a typical urban buyer running a vehicle for five years and 75,000 km. Registration charges are indicative for a metro city as they vary significantly by state and vehicle price slab.

Based on these estimates, the five-year ownership cost of CNG and EVs is broadly comparable, Upadhyay said.

Choksi covers around 200 km on an average day, occasionally touching 300 km, moving between the schools he runs across the city, comfortably within an EV's range.

The bigger draw, though, has been what he's saved on maintenance. "My Venue gave me a Rs 2 lakh repair bill after eight years and 50,000 km," he told The Core. "My Nexon has cost me nearly 70% less to maintain over five years of driving it. That number alone made the case for me, fuel prices aside."

Hybrids, by contrast, remain the expensive option; their higher acquisition cost keeps overall ownership costs elevated even though they're more fuel-efficient than petrol. That gap isn't going away soon, as hybrids currently attract a GST rate of 43%, against just 5% for EVs.

Rohan Kanwar Gupta, vice president & sector head, corporate ratings at ICRA, is more explicit about how much weight to put on the fuel-price story.

"While higher fuel prices and concerns around fuel efficiency in the recent past are likely to have contributed to an incremental boost to alternate powertrains, purchase decisions in India continue to be driven primarily by upfront affordability, infrastructure availability and ownership economics," he told The Core.

In other words, three things matter to most Indian buyers. One, upfront cost including the ex-showroom price and EMI. Two, infrastructure including CNG and EV charging points. Three, running cost over the vehicle's life, including fuel, electricity, service and repairs, the same five-year math Choksi and Crisil's estimates both point to.

The Core has previously reported that India's charging network, particularly public charging, remains held back by low utilisation, high capital costs, fragmented state-level policy, and real estate bottlenecks in dense cities.

That gap also helps explain why EV adoption today looks less like a mass-market shift and more like a story of buyers who've solved the charging problem for themselves.

Banerjee said that gap is exactly why hybrids still matter, at least for now. "Today, EV infrastructure will take time to build out. Till then, hybrids and plug-in hybrids are going to play a role."

Maruti and Toyota remain the two major players offering hybrid vehicles in India. Hybrid registrations rose 8% to about 3.8 lakh units in FY26, accounting for 8% of passenger vehicle registrations.

The switch to EVs has worked for someone like Choksi because he has built the infrastructure at home. This includes two chargers and solar panels, which means his cars are essentially charged for free overnight. What gives him added peace of mind is having his father's Lexus ES hybrid as a fallback option for long-distance travel, so range anxiety never really factors into his city driving decisions.

It is buyers like him, with dedicated parking and power already in place, who don't have to negotiate with a housing society just to plug in, that are driving EV adoption in cities today.

What June's Numbers Are Actually Showing

Maruti's roughly 41% CNG share this quarter is the product of years of investment the company is cashing in on. Hyundai, by comparison, gets an estimated 18-20% of its sales from CNG, spread across three models, including the Grand i10 Nios, Exter and Aura, against 62-65% for petrol and 17–20% for diesel.

On EVs, the leaderboard flips. Tata Motors posted its highest-ever monthly EV sales in June at 14,800 units, volumes nearly tripling year-on-year. "We are seeing encouraging growth in EV adoption across segments, with strong momentum in the entry EV category," said Shailesh Chandra, MD and CEO, Tata Motors Passenger Vehicles.

Tata and Mahindra, along with JSW MG Motor, account for the majority of India's EV sales, even as overall electric passenger vehicle retail sales hit an all-time high of 31,823 units for the month.

Take the case of Rishabh Chaturvedi. An entrepreneur from Uttar Pradesh, who drives roughly 75 km each way between Prayagraj and Mirzapur every day. He used to make that commute in a Mahindra Scorpio, spending Rs 1,200-1,400 a day on diesel alone.

When it was time to replace the Scorpio, diesel was still his first instinct, not CNG as he'd always been wary of long queues at CNG stations and didn't want to lose time refuelling on a route he drives daily.

Hybrids were never really on the table either because they sat beyond what he'd budgeted for a new car. What shifted his thinking, oddly enough, came from a relative who works for a petrol pump business and flagged the extent of the ongoing fuel price volatility and the uncertainty around India's E20 ethanol-blending rollout.

He eventually bought a Mahindra XEV 9e, his first EV, and a purchase that stretched slightly beyond his original budget. But he'd calculated the running-cost numbers before buying and was satisfied with what they showed. Four months in, he charges overnight for eight to ten hours, a routine that works fine for a commute as predictable as his.

"I didn't want to take a chance on something as expensive as a car, so before deciding I spoke to a lot of people who already owned EVs," Chaturvedi told The Core.

Experts suggest further push for EV momentum could come once the country's two largest carmakers, Maruti and Hyundai, currently on the sidelines of the EV race, bring offerings to the market.

Maruti sells just one model domestically, the e Vitara, producing fewer than 2,000 units per month for the local market. Banerjee said the company won't ramp up domestic production until September, because of prior export commitments.

Hyundai's EV share sits at around 1%, split between the premium Ioniq 5 and the mass-market Creta EV. Its Kona Electric was quietly discontinued five years after launch, and it has no hybrid offering for India at all, though Hyundai has announced a locally developed, mass-market EV due this year.

The Regulatory Push

Underneath the fuel price spike is a regulatory push. From April 2027, new Corporate Average Fuel Efficiency (CAFE) Phase-3 norms will require automakers to keep their fleet-wide average CO2 emissions below a set limit.

Draft rules released last week lay out how this will work. Carmakers that beat their targets earn credits, while those that miss them rack up penalties. Crucially, the rules don't favour any one technology over another. Instead, they reward whichever mix of vehicles (CNG, hybrid, EVs or flex-fuel) a company sells that actually cuts emissions, leaving automakers to decide how they get there.

In anticipation, most companies have lined up new product launches since last year and plan to accelerate their push toward cleaner technologies, thereby offering more choices to consumers. This will also be aided by aggressive state-level policy pushes such as the recently announced Delhi EV policy.

ICRA expects the alternate fuel segment to keep expanding over the next three to four years on the back of tighter emission norms, automakers' fuel-efficiency push, a widening range of models, and improving charging and CNG infrastructure.

Vigneshwar has projected that alternate fuel vehicles could reach as much as 50% of passenger vehicle sales within two to three years.

Going forward, it will be worth tracking how the demand for various alternate powertrains evolves and whether CNG's 24.33% share holds up if fuel prices retreat from their post-spike highs.