A senior industry official said on Thursday that consumer uncertainty surrounding India’s shift to E20 petrol is driving some buyers to opt for vehicles that run on alternative fuels.

According to the Federation of Automobile Dealers Associations (FADA), sales of alternative-fuel passenger vehicles including CNG, hybrid, and electric models neared those of petrol vehicles in July, coming within "striking distance."

These vehicles accounted for 40.59% of total sales in July, just 1.09 percentage points ​behind petrol-powered vehicles at 41.68%.

India's petroleum and road transport ministries did not immediately ​respond to Reuters requests for comment.

The change follows worries over India’s nationwide introduction of E20 petrol, which includes 20% ethanol—a plant-based alcohol blended with petrol to cut reliance on imported crude oil—replacing the previous E10 formulation.

The shift has faced criticism from some consumers, who claim that the higher ethanol blend reduces fuel efficiency and harms vehicle performance, especially in older models that were not engineered for E20 fuel.

"What we are seeing is more consumer queries than complaints," Sai Giridhar, vice president of FADA, told Reuters, noting that dealers have not received any complaints connecting vehicle problems to E20 fuel, even though they service thousands of models each month.

Giridhar said the share of petrol-powered passenger vehicle sales dropped to around 41%, down from 47.6% a year earlier, while diesel’s share held steady at roughly 18%.

As petrol’s share fell, CNG and electric vehicles expanded their presence. CNG’s share increased to around 24% from 21% a year earlier, while EVs made up nearly 8% of sales, rising from about 5%, he noted.

Giridhar stated that dealer surveys indicate some customers are postponing the purchase of petrol vehicles or considering alternative-fuel options due to worries about E20, fuel efficiency, and vehicle compatibility.

He largely linked the anxiety to misinformation and limited awareness, noting that car manufacturers and dealerships were initially ill-equipped to handle the surge in customer questions about the shift in fuel types.

FADA stated that although passenger vehicles are entering August with strong order pipelines and new launches, more transparent communication about the E20 rollout could encourage hesitant buyers to proceed with purchases.

FADA reported that overall retail sales of passenger vehicles climbed 19.1% year-on-year in July to 416,555 units, driven by demand following tax reductions and the introduction of new models.