A comprehensive survey of over 28,000 prospective buyers across 311 districts has revealed significant concerns about ethanol-blended fuel policies influencing vehicle purchase decisions. According to the LocalCircles survey, 43% of respondents stated they may defer or avoid buying a vehicle in the next 12 months due to uncertainty surrounding E20 petrol and the government's proposed transition towards higher ethanol blends. An additional 30% indicated they had no immediate need to purchase a vehicle, while 43% were not planning to buy any new vehicle due to fuel-related uncertainties. The findings come at a time when vehicle retail sales touched an all-time high of 25.31 lakh units in May 2026, up 9.55% year-on-year, according to Federation of Automobile Dealers Associations (FADA) data, with passenger vehicle registrations crossing the 4 lakh mark for the first time in a single month.
The survey revealed a notable decline in interest in traditional petrol vehicles, with only 6% of respondents planning to buy a new petrol vehicle in the next year. In contrast, 14% combined indicated intentions to purchase either new electric or hybrid vehicles, with 7% each favoring EVs and hybrids respectively. Another 3% planned to buy a new diesel vehicle. This shift towards alternative fuel vehicles suggests that consumers are increasingly considering fuel-policy uncertainty and future operating costs in their purchase calculations. The trend mirrors broader market developments, with EVs accounting for more than 11% of total vehicle retail sales in May 2026, while electric cars recorded a 7% share of passenger vehicle sales. EV sales crossed 24.5 lakh units in FY26, growing 25% year-on-year, while hybrid vehicle sales more than doubled during the first quarter of the fiscal year.
India completed the nationwide rollout of E20 petrol in April 2025 and has since notified standards for blends containing up to 30% ethanol. The government maintains that E20 will remain the standard fuel until October 2026, after which decisions on higher blends will be taken following further studies and consultations. The Bureau of Indian Standards has already notified technical specifications for E22, E25, E27 and E30 petrol blends, while the Automotive Research Association of India is studying the impact of higher ethanol blends on engine life and fuel efficiency. With the government evaluating higher ethanol blends and their impact on vehicles, the survey suggests that clarity on fuel-roadmap timelines, vehicle compatibility and real-world performance could play an important role in restoring consumer confidence and supporting future vehicle demand.
According to a separate LocalCircles survey of more than 50,000 petrol vehicle owners, concerns have intensified since the E20 rollout. The survey found that five in 10 respondents reported fuel-efficiency losses of over 10% after transitioning to E20, while three in 10 reported increased wear and tear or repair requirements. Vehicle owners have also reported lower mileage and higher maintenance costs since the introduction of ethanol-blended fuel. The findings suggest that fuel-policy uncertainty has moved beyond being a vehicle ownership issue and is increasingly influencing purchase decisions, with consumers becoming more hesitant about future fuel compatibility and operating costs.
The survey findings could have significant implications for automakers, particularly manufacturers with large petrol-vehicle portfolios. While the survey does not establish direct sales impact, it suggests that uncertainty around future fuel compatibility and operating costs is becoming part of consumers' purchase calculations. The government continues to support the ethanol-blending programme as part of India's energy-transition strategy, with Petroleum Minister Hardeep Singh Puri repeatedly backing the initiative despite consumer concerns about vehicle performance impacts. The survey points to a growing tilt towards alternative powertrains, with combined purchase intent for EVs and hybrids standing at 14%, more than double the proportion of respondents planning to buy a new petrol vehicle, indicating that fuel-policy uncertainty is emerging as a fresh challenge for future automobile demand despite record sales numbers.
