Green cars to hit 30% of total car sales in five years: study

The combined share of CNG, EVs and HEVs could reach 30% in the next five years as EVs and greener vehicles gain penetration in the Indian auto market, according to a study by ratings agency ICRA. It also claims that petrol cars are likely to dominate the passenger car sales charts in the medium term.

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Updated on:
February 7, 2023 at 20:52 pm

Positive consumer sentiment has played a key role in the growth of electric vehicle sales in India. (Associated Press)

The study also noted that increased demand for electric vehicles will drive this growth. The share of these green cars has grown exponentially over the past two years, with new vehicle launches, government push and growing consumer positive sentiment towards EVs, it said. However, the share of EVs in the overall passenger vehicle industry remains low at just 1 percent, the study said.

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When it comes to CNG vehicles, the market share of these green vehicles has increased in recent years, the study said. The growth in CNG vehicle market share is driven by the high cost of gasoline and diesel, favorable running costs of CNG vehicles, increasing penetration of CNG pumps in India, and increasing product offerings from automakers. The study further notes that the low emissions of CNg vehicles will also help OEMs comply with upcoming corporate average fuel economy (CAFE) specifications.

Flex fuel engine technology has been grabbing headlines for quite some time in India. Ethanol-blended gasoline, which emits lower emissions than conventional gasoline, has been pushed by the government, prompting automakers to switch to the technology. Manufacturers will face significant challenges in complying with the proposed ethanol blending norms, the study said. However, it also said ethanol blending would reduce vehicle emissions, enhance energy security and help reduce oil imports and preserve foreign exchange reserves.

The study also said that ethanol blending in gasoline has gradually increased in recent years, with India achieving 10% ethanol blending by 2022a. By the way, the central government has brought forward the E20 implementation target from 2030 to 2025 earlier.

First published date: Feb 7, 2023 at 20:52 PM CST

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