Petrol car, SUV sales slip in July as diesel makes a comeback amid E20 concerns

The share of petrol-powered cars in passenger vehicle sales fell from 43.15% in June to 41.68% in July amid growing concerns around E20, a fuel blend comprising 20% ethanol and 80% petrol.

Meanwhile, the penetration of diesel in new cars sales rose marginally from 16.32% in June to 17.73% in July, according to data released by the Federation of Automobile Dealers Associations (FADA).

Consumer hesitation around the E20 transition nudged buyers towards CNG (compressed natural gas), hybrids and electric vehicles (EVs), said FADA Vice President Sai Giridhar.

There is a need for “clear and confident consumer communication on the E20 fuel transition” to convert hesitant petrol buyers, said Giridhar.

EVs made up 8% of overall passenger vehicle sales for the second straight month in July. Battery-powered cars and SUV sales have seen an uptick after the West Asia war.

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The penetration of electric vehicles in India’s passenger vehicle sales stood at 8% in June, 6.6% in May and 6.6% in April. That marks a sharp jump from FY26, when EVs made up 4.2% of passenger vehicle sales, with 2,00,000 EVs sold out of total sales of 4.7 million.

Every automobile category posted its best-ever July, with two-wheelers, three-wheelers, commercial vehicles, passenger vehicles, tractors and wheeled construction equipment all at all-time July highs.

The industry retailed 25,91,138 units, up 25.89% year-on-year, the strongest July growth in the series outside Covid-distorted base years, said FADA.

Retail sales of passenger vehicles grew 19.13% year-on-year to 4,16,555 units in July. Two-wheeler sales jumped 28% year-on-year to 18,18,289 units. Three-wheeler sales rose 16.16% to 1,33,778 units.

“That a seasonally soft, erratic monsoon July ranks as the 12th-highest retail month of the 151 months since Jan’14 — a list otherwise dominated by festive months — speaks to the structural depth of the India Growth Story,” said Giridhar.

Dealers attributed this momentum to GST 2.0-led affordability, ease of retail finance and favourable festival timing on a July 2025 base that had declined nearly 4%, alongside increased demand for alternative fuels such as CNG.

The share of EVs in two-wheelers touched a record 11.24% against 7.65% a year ago as short supplies of high-demand models left bookings pending.

Total EV retails touched 3,27,901 units, the highest for any month in history, with 2W and commercial vehicle EV volumes at all-time records, taking overall EV penetration to about 12.7% from 9.6% a year ago.