A multiplicity of fuel technologies, from CNG to biogas, from hydrogen to electric vehicles, will power India's green transportation future.
14 Apr 2025 | 726 Views | By Autocar Professional Bureau
Walk into a small roadside kirana store in rural Maharashtra or the bustling lanes of a Delhi colony, you’ll find a tiny strip of plastic hanging near the cash counter—shiny sachets of shampoo, often priced at just Rs 1 or 2. They’re modest reminders of a moment of reckoning that ...
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Walk into a small roadside kirana store in rural Maharashtra or the bustling lanes of a Delhi colony, you’ll find a tiny strip of plastic hanging near the cash counter—shiny sachets of shampoo, often priced at just Rs 1 or 2. They’re modest reminders of a moment of reckoning that made global companies rethink their playbook for India.
In the early days, multinational brands entered the Indian market with the same logic that worked elsewhere: large, family-sized shampoo bottles, often expensive and meant for bulk purchase. But they missed a critical insight—India doesn’t move in uniform patterns. Millions of consumers don’t shop for the month; they shop for the day.
The shampoo sachet was born out of the need for Indian consumers for something small, affordable, and accessible. India's path to sustainable mobility is no different. From dense urban traffic to rugged rural roads, from daily-wage laborers to tech-savvy millennials, mobility needs in India are as layered and diverse as its people. Expecting a single fuel type for the future is as flawed as trying to sell only shampoo bottles in a country that thrives on sachets.
Just like the logic of the sachet, India's path to sustainable mobility has to be adaptive, inclusive, and tailored to its unique realities. India’s automotive sector is embracing a multi-fuel approach to sustainable mobility, choosing a diversified path over full electrification, Industry leaders from companies like Tata Motors, Mahindra & Mahindra, Ashok Leyland, Toyota Kirloskar Motor, Stellantis India, etc. said at the Future Powertrain Conclave, organised by Autocar Professional in partnership with the Government of Tamil Nadu.
They advocated for a multi-fuel strategy that balances EVs, hybrids, biofuels, hydrogen, compressed natural gas (CNG) and flex-fuel technologies to align with consumer demand, infrastructure constraints, and economic realities. “Clearly there is going to be a shift towards sustainable technologies. But it's going to be a multiple technology path forward with the mix being very diverse for different markets depending upon their unique context and the customer acceptance,” said Vikram Gulati, Country Head & EVP - Corp. Affairs & Governance, Toyota Kirloskar Motor (TKM).
Stellantis India’s Managing Director and Chief Executive Officer Shailesh Hazela expects internal combustion engine vehicles to remain crucial in India for the foreseeable future. But they will coexist alongside flex fuels, hybrids, EVs and other fuel types. The automotive industry is at the cusp of a major transition, what with powertrain technologies evolving faster than ever before.
EVs: The Next Big Frontier
As India works toward achieving net-zero emissions by 2070, electric vehicles (EVs) have emerged as a key pillar in the country’s sustainable mobility strategy. With rising investments, strong policy backing, and innovation across sectors, EVs are increasingly seen not just as cleaner alternatives but as an opportunity to reshape India’s automotive and energy landscape.
Yet, challenges remain. According to Thiruppathy Srinivasan, head of the EV Task Force for the Government of Tamil Nadu, one of the most pressing needs is to localize manufacturing. “The number of OEMs who have invested in the EV sector has been pretty good… But when it comes to Tier 1 and Tier 2 suppliers, particularly in critical components and raw materials, the level of investment is still not at the level we need,” he said.R. Velusamy, President of Automotive Technology and Product Development at Mahindra & Mahindra emphasized that India’s transition must reflect local realities.
“India is a different story. Buying behaviour, per capita income, and driving habits are all different. We must create our reference point.” Velusamy urged governments to maintain policy stability, cautioning against abrupt changes like the rollback of road tax exemptions for EVs. “You should allow this young, budding seed to grow… You cannot kill it in the bud,” he said.
Hybrids: A Catalyst, Not Just a Bridge
India’s journey toward clean mobility is not a race to catch up with the West—it is a strategic transition grounded in its own realities. While the Global North accelerates toward full electrification, India is adopting a balanced, pragmatic approach. In a country where affordability, infrastructure readiness, and energy security weigh heavily on policy decisions, hybrid vehicles are emerging as a vital bridge toward a low-carbon future.
“The future is electrified—but not electric alone,” says Vikram Gulati, Country Head and Executive Vice President – Corporate Affairs and Governance, Toyota Kirloskar Motor. “What matters is the collective shift away from fossil fuels toward technologies that are sustainable, scalable, and suited to the local context.” Despite a growing portfolio of battery electric vehicles (BEVs), EVs accounted for just around 2.5% of new car sales in India in 2024.
The hybrid resurgence is a product of both consumer interest and industrial strategy. As Gulati explains, hybrid technology was born out of necessity: “When Toyota started its electrification journey in 1996 with the electric RAV4, it faced the same challenges we see today—infrastructure, cost, and charging time. Hybrids offered an elegant solution— delivering electrification benefits using just one-sixtieth the battery size of a full EV.”
Hybrids are often seen as transitional—but for many industry leaders, they’re catalysts for broader electrification. According to Anoop Bhat, Powertrain & XEV Design Head at Maruti Suzuki India, hybrids can accelerate electrified powertrain adoption by strengthening the development and supplier ecosystem. “Hybrids share many components and processes with EVs, which helps in streamlining production and making electrification more accessible,” he said.
Industry leaders say that plug-in hybrids could be a game-changer in India’s urban mobility ecosystem, offering the flexibility of electric driving with the backup of an internal combustion engine. Yet their adoption remains marginal due to high upfront costs and lack of policy incentives.
“From a consumer’s point of view, PHEVs offer an excellent balance—electric commuting with the security of a petrol engine,” says Gulati. “But the TCO doesn’t work. They’re taxed the same as strong hybrids despite higher costs, primarily due to larger batteries and charging hardware.” In Southeast Asia, markets such as Thailand, Indonesia, and Vietnam are witnessing faster adoption of strong hybrids andPHEVs compared to BEVs.
This trend is driven by lower upfront costs, better fuel efficiency, and the lack of widespread charging infrastructure in both urban and rural areas. Thailand has implemented a tax regime that strongly incentivizes hybrids and flex-fuel vehicles, making them more attractive to consumers.
Indonesia, meanwhile, is advancing EV adoption while also scaling up its ethanol and biodiesel programs as part of a broader clean mobility strategy. Both countries are prioritizing the localization of battery and component manufacturing, aiming to reduce dependence on imported EV supply chains and build domestic capabilities from the ground up.
The Role of Hydrogen, Biofuels, and Alternate Fuels
Alternate fuels such as hydrogen, ethanol, biogas, and compressed natural gas (CNG) are increasingly being seen as vital components in India’s clean energy mix. With rising diesel prices and post-BS6 complexity in diesel powertrains, CNG has steadily gained traction— especially in the three-wheeler and small commercial vehicle segments. Its adoption is accelerating across India, with plans to establish over 17,500 CNG stations by 2030.
Simultaneously, government initiatives like the FAME-II policy and Production-Linked Incentive (PLI) schemes are bolstering the electric vehicle ecosystem— especially in the two- and three-wheeler segments, where the shift to electrification is gathering strong momentum. “From 70–80% diesel dominance in 2016-2019, the three-wheeler market has flipped,” said Sandip Chaudhari, CTO, Greaves Cotton.
“Now diesel is down to about 20%, while CNG has surged to 40–45%.” The next frontier in this segment is Compressed Biogas (CBG), a renewable form of natural gas produced from organic waste. In 2023, the National Biofuels Coordination Committee approved a phased blending plan to mix CBG with CNG and PNG, targeting a 5% blend by 2028–29.
This blending will be voluntary until 2024–25, after which a Central Repository Body will oversee implementation. For OEMs and component makers, this signals a long-term market opportunity in CNGcompatible platforms and infrastructure. “CNG vehicles offer near-zero emissions at a significantly lower cost than EVs,” Chaudhari noted. “In many applications, they’re simply the most practical green option.” Another key, upcoming fuel is green hydrogen— produced using renewable electricity.
With over 85% of crude oil needs currently met through imports, developing domestic hydrogen infrastructure is both an economic and environmental imperative. The National Green Hydrogen Mission, launched in 2023, aims to produce 5 million metric tonnes per year by 2030. Both fuel cell electric vehicles (FCEVs) and hydrogen internal combustion engines (H2- ICEs) are on the table. Industry leaders point out that ethanol blending is another important focus area for Indian companies.
India has achieved nearly 12% ethanol in petrol in 2023 and is targeting 20% by October 2025. Ethanol is produced either through sugar fermentation or petrochemical processes, offering a cleanerburning alternative to traditional fuels. However, scaling up beyond E20 to E85 (85% ethanol blend) presents challenges. It would require a 3–4x increase in ethanol production, which is unsustainable if sugarcane remains the primary feedstock.
“We need second-generation biofuels and alternate feedstocks to scale sustainably,” noted George Anthony P, General Manager, Powertrain Systems Engineering, Bosch India. From long-haul trucks powered by hydrogen to city cabs running on CNG and biofuels, each technology plays a role in reducing emissions and cutting oil imports. “We don’t need to pick one winner,” said Ramakrishna Donakonda VP, (Powertrain and e-drive), Daimler Truck Innovation Center India. “What we need is a portfolio approach that reflects India’s diversity—of geography, income, and energy access.”
Diesel's Second Act
In the race toward clean mobility, diesel remains firmly in the lead—at least in India’s heavy-duty transport segment. While global headlines are dominated by electric and hydrogen innovation, industry leaders make one thing clear: They are not ready to write off diesel yet. Rajendra Petkar, President and CTO of Tata Motors, put it bluntly: “Diesel will continue to rule the roost… because that’s the workhorse, and it’s a dependable workhorse.”
According to Petkar, the role of diesel in India’s commercial vehicle sector—especially in freight and longhaul transport—is irreplaceable in the near term. Ganesh Mani, COO of Ashok Leyland, echoed this sentiment, offering a candid take on the competitive fuel landscape: “It’s like a horse race—diesel, CNG, LNG, hydrogen ICE, hydrogen fuel cell, and electric—all of them are lined up on the track. And the customer is only thinking about one thing: the total cost of ownership.”
He emphasized that diesel’s maturity, reliability, and infrastructure advantages make it the most cost-effective and scalable solution today, especially in the absence of widespread alternatives. Both Petkar and Mani highlighted that diesel technology itself is not stagnant. Regulatory pressure is pushing OEMs to improve combustion efficiency, integrate advanced aftertreatment systems, and even explore synthetic and bio-based diesel blends in the future.
This cleaner iteration of diesel will be key to balancing environmental goals with real-world operational needs. Rather than seeing diesel as an obstacle, Indian OEMs view it as a bridge fuel—one that enables a smoother, more realistic transition to net-zero logistics. Cleaner diesel engines, combined with complementary fuels like LNG, hydrogen, and bio-CNG, form the basis of a hybrid energy future tailored to India's unique constraints.
As Mani put it, “You have to work with multiple pathways. That’s the engineer’s challenge.” India’s automotive industry stands at a pivotal juncture—balancing cost, compliance, and innovation amid tightening emission norms and the push for electrification and alternative fuels. The choices made now will shape the future of mobility. “Hydrogen gives us a shot at becoming an energy exporter,” said George Anthony from Bosch India.
“It’s clean, scalable, and works well with our existing engine technologies.” Bosch expects hydrogen tech to account for 10–15% of the Indian truck market by 2030. Similarly, Daimler Truck is betting on hydrogen for long-haul applications, citing easier refueling compared to battery charging for large vehicles. Still, scaling up remains a challenge. Production costs are high, and a robust supply chain is still in its infancy.