With lower costs and an expanding retail network, CNG passenger vehicle sales have overtaken diesel for the first time.
10 Apr 2025 | 1539 Views | By Ketan Thakkar & Ashutosh Radhey Shyam
For the first time in India’s automotive history, compressed natural gas (CNG) has surpassed diesel in the passenger vehicle segment, marking a significant milestone in the country’s transition to clean mobility. The rising popularity of CNG-powered vehicles—fueled by cost advantages and a rapidly expanding retail network— has propelled CNG passenger ...
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For the first time in India’s automotive history, compressed natural gas (CNG) has surpassed diesel in the passenger vehicle segment, marking a significant milestone in the country’s transition to clean mobility. The rising popularity of CNG-powered vehicles—fueled by cost advantages and a rapidly expanding retail network— has propelled CNG passenger vehicle sales ahead of diesel for the first time, marking a pivotal shift in India’s clean mobility push.
In 2024, Indian automakers sold 773,000 CNG vehicles, representing a robust 41% year-over-year growth, while the overall passenger vehicle market posted modest singledigit gains. This surge enabled CNG to edge past diesel by nearly 1,000 units over the year. The momentum carried into the first quarter of 2025, with CNG registrations reaching 248,258 units compared to 208,102 diesel passenger vehicles. CNG’s market share climbed from 18% in 2024 to 21% in Q1 2025, while diesel’s share continued to decline, slipping to 17.59%.
Infrastructure Drives Adoption
The rapid growth in CNG vehicle sales is closely linked to the swift expansion of India’s CNG retail infrastructure. As the number of outlets has multiplied, CNG adoption has surged across key states—driven by compelling cost economics and significantly shorter payback periods for consumers.
By the end of FY24, the number of CNG retail stations had increased to 8,081— a significant jump from 1,428 in 2019, according to the Ministry of Petroleum and Natural Gas' annual report. Delhi, Maharashtra, Haryana, Uttar Pradesh, and Gujarat have emerged as major CNG hubs, collectively accounting for nearly 70% of national CNG vehicle sales.
Maharashtra, for instance, recorded a total CNG sales volume of 1,130 TMT in FY24, with CNG vehicles comprising 37.87% of total passenger car sales and an impressive 86.32% penetration in the motor cab segment. In March alone, the state recorded sales of approximately 15,000 CNG passenger vehicles and 5,000 CNG motor cabs, according to Vahan data.
Gujarat followed closely, with CNG accounting for 38.72% of car sales and 75.21% penetration in the cab segment. In Uttar Pradesh, the most populous state, CNG adoption reached 28.44% for passenger cars and a remarkable 88.21% in the cab category—one of the highest in the country.
The transformation is particularly notable in Karnataka, where CNG sales surged to 112,000 metric tons (TMT) in FY24, up from 56 TMT in FY23 and just 15 TMT in FY22. This growth has been propelled by the presence of eight city gas distribution (CGD) companies, including AGP City Gas, Unison Enviro, Megha CGD, BPCL, and GAIL Gas Ltd., which have rapidly expanded the state’s infrastructure.
As a result, monthly CNG passenger vehicle sales in Karnataka consistently crossed 3,000 units in the first quarter of 2025, contributing nearly 10% to India’s total volume. Notably, CNG now powers 74% of the state’s cab segment— underscoring its rising appeal among fleet operators who prioritize lower operating costs and faster returns on investment.
Maruti Drives CNG Growth
Traditionally, India’s fleet segment relied heavily on dieselpowered vehicles, particularly those under 4.5 meters in length. However, the growing availability of CNG—now accessible at nearly every retail outlet—combined with a wider range of factory-fitted CNG options, has significantly accelerated the shift away from diesel. Today, more than 25 passenger vehicle models come with CNG variants that directly compete with their diesel counterparts.
This transition has been led primarily by Maruti Suzuki, which exited the diesel segment in 2020 and has since positioned CNG as a cleaner, cost-effective alternative. In 2024, Maruti sold 548,399 CNG vehicles—a 112% increase over the past five years. Notably, one in every three Maruti cars sold currently, runs on CNG, and its CNG sales have already surpassed the company’s diesel peak of 467,966 units in 2017.
CNG is no longer confined to entry-level hatchbacks. Maruti now offers CNG variants across a broad range of body styles and price points—including models like the Ertiga, Brezza, Grand Vitara, Wagon R, and Alto. This expanded portfolio has helped CNG appeal to a wider audience, including families and aspirational urban buyers.
This strategy has paid off. Maruti commands a dominant 70–71% share of India’s CNG vehicle market, with topperforming models like the Wagon R, Ertiga, and Dzire. The Ertiga, in particular, has a 64% CNG share; the Wagon R and Dzire follow closely with 47% and 54%, respectively. CNG now accounts for 31% of Maruti Suzuki’s total sales.
Tata Motors has also posted a strong performance, selling 124,226 CNG vehicles in 2024. The company’s CNG share has risen to 22%, while diesel’s share has dropped to just 14%. Tata recorded an impressive 77% year-on-year growth in CNG sales, driven by innovative dual-cylinder models like the Punch and Nexon. Hyundai, although slower to shift, has begun expanding its CNG offerings as well.
The Aura stands out with an 88% CNG mix in its overall sales—the highest in the segment. That said, diesel still accounted for 17% of Hyundai’s total vehicle sales in 2024, slightly more than its CNG share. The shape of the CNG market is also evolving. While hatchbacks—once dominant in this space—have seen a relative decline, CNG adoption is rising in SUV-styled and MUV formats. Larger vehicles like the Ertiga continue to perform well, particularly among fleet buyers drawn to their low running costs and high utility.
Meanwhile, the introduction of CNG in models like the Brezza, Grand Vitara, Nexon, and Punch reflects shifting consumer preferences toward bigger, more versatile vehicles—without compromising on fuel economy.
Technology Solves Practical Challenges
One of the biggest breakthroughs in CNG adoption has been the introduction of dual-cylinder technology, which effectively addresses boot space limitations—previously a major drawback. Tata Motors pioneered this with models like the Altroz and Nexon, and Hyundai followed suit with the Exter. These innovations have made CNG vehicles more practical and appealing for everyday use.
Wider Options and Rise in Personal Buyers
CNG vehicle penetration has been particularly strong in the hatchback and sedan segments, where diesel’s market share has nearly vanished. In contrast, diesel continues to hold its ground in the larger vehicle category—those exceeding 4.5 meters in length, where it has maintained an annual growth rate of 18.95% over the past four years. In 2024, diesel vehicle sales in this segment reached 385,725 units, accounting for nearly two-thirds of the total sales volume.
A decade ago, diesel was the dominant choice for both personal buyers and fleet operators, mainly due to a substantial price gap with petrol—Rs 25 to Rs 27 per liter in 2012 and 2013. At its peak, diesel-powered cars accounted for nearly 50% of all vehicle sales in India, with approximately 1.4 million units sold in 2012. Since then, the growing affordability of CNG has steadily eroded diesel’s advantage.
Today, CNG is priced at Rs 77 per kilogram, while diesel stands at Rs 91 per liter—making CNG nearly 30% cheaper than both petrol and diesel compared to a decade ago. CNG’s biggest strength lies in its lower running cost— approximately Rs 3.70 per kilometer, compared to Rs 6.85 for diesel.
While CNG vehicles typically cost around Rs 1 lakh more than their petrol equivalents, this premium is recovered within 18 months of ownership. Over a 4–to 5– year period, CNG vehicles offer a significantly lower total cost of ownership compared to diesel vehicles. Even though CNG prices have risen—from Rs 50–55 per kilogram a few years ago to Rs 70–75 today—the fuel retains a decisive edge in operating costs.
The temporary price surge between 2020 and 2022, triggered by the Russia- Ukraine conflict, was managed through government intervention via the Kirit Parikh Committee. As a result, prices have stabilized, and demand has rebounded sharply over the past two years. Beyond economics, CNG vehicles also enjoy regulatory advantages. Unlike diesel vehicles, which face age restrictions in states like Delhi-NCR—where they are banned after 10 years—CNG models retain higher residual value and longer usability.
Environmentally, CNG emits significantly less nitrogen oxides and particulate matter than diesel, thereby helping to improve air quality, particularly in urban areas struggling with high pollution levels. As such, cities burdened by poor air quality are increasingly wary of diesel, accelerating the shift toward cleaner alternatives like CNG.
Hence, unlike Diesel, CNG has a strong backing from the Government of India. CNG vehicles now make up 18% of India’s total passenger vehicle sales. Their popularity is particularly strong among fleet operators, who value the lower running costs, longer regulatory lifespan, and a cleaner emissions profile.
Rising Above Safety Concerns
CNG’s early journey in India was marked by skepticism, largely due to safety concerns stemming from substandard retrofitting practices. However, with the implementation of BS-VI norms and the widespread availability of factoryfitted kits, these fears have significantly diminished.
Automakers have worked to educate consumers, and today’s CNG vehicles are tested to the same safety standards as traditional petrol and diesel vehicles, helping shift public perception.
Conclusion: The New Fuel of Choice
CNG is no longer just a budget-conscious option—it is now a versatile, mainstream fuel that caters to both economy and aspiration. With growing model diversity, stable pricing, regulatory advantages, and strong OEM support, CNG is redefining what affordable and sustainable mobility looks like in India.