Road To Cleaner Fuels: Fossil Fuel-Based Vehicles Are Expected To Dominate In The Future

In his book, The Third Industrial Revolution, economist Jeremy Rifkin says that every major economic shift is driven by changes in energy use and transportation. The global automotive industry is undergoing such a transformation, from fossil fuels to sustainable alternatives like electric, CNG and biofuel. In India, where the transport sector accounts for 10% of greenhouse gas emissions, the government is targeting net-zero emissions by 2070. The world’s third-largest auto market is expected to add 10 million vehicles by 2030. Automakers are adopting a multi-powertrain approach—integrating EVs, CNG, hybrids and biofuels—to meet their sustainability goals. “These are a scalable pathway to reduce the carbon footprint. Their impact is amplified when supported by green manufacturing, sustainable supply chains and end-of-life recycling policies,” says Saket Mehra, Partner and Auto &amp; EV Industry Leader at Grant Thornton Bharat. EVs: Charging Ahead In CY2024, global EV sales surpassed 17 million units, pushing EVs’ share in the global car market above 20% for the first time, according to the International Energy Agency (IEA). The agency projects that one in four cars sold in 2025 will be electric, rising to over two in five by 2030. “Countries like China, the US, and EU members are investing heavily in EV infrastructure and battery innovation,” says Grant Thornton’s Mehra. EV adoption in passenger vehicles in India is 2–3%. But 2024 saw a 27% rise in overall sales of EVs to a record 1,949,114 units, driven by two-wheelers (59%) and three-wheelers (35%). India is targeting 30% EV penetration by 2030, supported by policies such as 5% GST on EVs, reduced road taxes in several states and subsidies under FAME (Faster Adoption of Manufacturing of Electric Vehicles and Hybrid Vehicles) and PM E-Drive (PM Electric Drive Revolution in Innovative Vehicle Enhancement) schemes. The Scheme for Promotion of Manufacturing of Electric Passenger Cars in India, offering import duty rebates, is also expected to attract global players. Automakers such as Maruti Suzuki, Tata Motors, Mahindra &amp; Mahindra and Hyundai are already ramping up their EV portfolios. Tata Motors, the country’s largest EV manufacturer, has planned an investment of `16,000-18,000 crore by 2030. “If we go by what the government and the Bureau of Energy Efficiency have been saying, it would mean 10%-plus EV penetration for a manufacturer like us. We are at 11%. So, we are comfortable,” Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, said in a recent analyst call. The company aspires to achieve more than 30% EV penetration by FY30. “We are pretty much on track,” he said. Maruti Suzuki, the country’s largest passenger vehicle manufacturer, plans to launch four EVs by 2030. Its first EV will roll out this September . “It is a freshly designed EV on a new platform which offers several safety and performance advantages—500 km range, battery safety, larger cabin space, Level 2 ADAS, seven airbags. Above all, the customer will get a lot of confidence when he sees the same car being exported to advanced markets like Europe and Japan,” says Rahul Bharti, Senior Executive Officer, Corporate Affairs, Maruti Suzuki India Ltd. Despite being late to the EV party, Maruti Suzuki is taking a measured approach. “We decided to adopt a more diversified approach and did not want to put all our eggs in one basket,” Chairman R.C. Bhargava wrote in the FY24 annual report. M&amp;M is also treading cautiously. Despite committing `12,000 crore to EV arm Mahindra Electric Automobile Ltd (MEAL) and launching electric models like the BE.6 and XEV.E9, it is scaling up slowly. “This is a business in which we don’t want to be rash. There is a lot of product complexity. We are learning new technologies as we ramp up, and so are our suppliers. We have to be cautious,” Rajesh Jejurikar, ED, Auto &amp; Farm, Mahindra &amp; Mahindra, said in a recent analyst call. But electrification faces hurdles such as affordability, shortage of charging infrastructure and range anxiety. “For two-wheelers and three-wheelers, we will obviously hit it, but for four-wheelers, it is going to be tough. At just 3% penetration in 2025, we don’t have a strong base. Achieving 30% in five years is a 10x leap, which is difficult,” says Rajat Mahajan, Partner and Automotive Sector Leader at Deloitte India. Grant Thornton’s Mehra concurs. “One of the foremost hurdles is the high upfront cost of electric and hybrid vehicles. Charging infrastructure is underdeveloped in many regions. India has a little over 25,000 public charging stations, concentrated in urban regions, limiting consumer confidence,” says Mehra. Hybrids Bridge Gap While it will take some time for Indian customers to widely adopt EVs, hybrids have emerged as a viable interim option. According to Deloitte’s 2025 Global Automotive Consumer Study, 33% of Indian consumers prefer hybrid electric vehicles (HEVs), while 12% view plug-in hybrids (PHEVs) as a more sustainable and economical option. According to Grant Thornton’s Mehra, hybrid vehicles, which combine internal combustion with electric propulsion, bridge the gap by improving fuel efficiency and reducing emissions without relying entirely on charging infrastructure. “Hybrid and hydrogen vehicles are gaining traction in markets where full electrification faces infrastructural or range-related challenges,” says Mehra. At present, Maruti Suzuki has the largest hybrid vehicle portfolio. By 2030, it wants hybrid vehicles to account for 15-20% sales. “All our efforts are to maximise EV adoption. EV penetration will not be 100% tomorrow. It is important to reduce carbon emissions from the rest of the fleet. Strong hybrids reduce CO2 emissions by over 30%,” says Bharti. Several automakers have retraced their hybrid strategy. Hyundai Motor India has announced plans to bring hybrids to the domestic market despite earlier apprehensions. Honda has also scaled back its global EV plans to focus on hybrids. “By 2030, we will strive to grow further and achieve total automobile sales volume above the current level of 3.6 million units, with a HEV sales target of 2.2 million units,” President and CEO Toshihiro Mibe said during the 2025 Business Briefing on May 20. CNG Alternative Unlike hybrids and EVs, CNG powertrains have managed to woo customers. They are, after all, not only economical but also sustainable. CNG accounts for over 15% of the domestic automobile market. Grant Thornton’s Mehra says CNG vehicles provide an immediate reduction in CO2 and particulate matter, making them a practical transitional solution, particularly for public transport and commercial fleets. Automakers like Maruti Suzuki, Tata Motors and Hyundai are bullish on CNG. Every third car sold by Maruti Suzuki is CNG. The company is aiming for 35% CNG penetration by 2030. CNG models accounted for 25% of Tata Motors’ sales in FY25. “It has been rocking for the last few years. It has seen 30% year-on-year rise despite 2% growth for the industry,” says Chandra. According to Mehra, in 2024, CNG vehicles saw the strongest sales growth of 46%, driven by affordability, fuel efficiency and popularity among cost-conscious buyers and commercial users. Despite this, CNG penetration is likely to face a hurdle owing to the limited number of CNG stations. Achieving The Target By embracing a multi-fuel strategy, the industry is laying a pragmatic foundation for sustainable mobility. While EVs remain the long-term goal, transitional technologies like hybrids and CNG will play a critical role in bridging gaps in infrastructure, affordability and customer readiness. “While the industry is on the right path—with increasing investments in EV infrastructure, battery manufacturing and sustainable mobility solutions—it is not yet fully on track to meet net-zero emissions by 2030. Instead, the sector is more realistically aligned with India’s national net-zero target of 2070, with 2030 serving as a critical milestone for deep emission cuts and technology transition,” says Mehra. @orielastha11

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Road To Cleaner Fuels: Fossil Fuel-Based Vehicles Are Expected To Dominate In The Future

While EVs and hybrids are emerging as reliable alternatives, fossil fuel-based vehicles are expected to dominate Indian roads in the near future.