# Economic Trends

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The Slow Retreat of the Petrol Engine: What's Driving Down Gasoline Car Market Share Global sales of gasoline-only passenger cars have declined in relative terms for nearly a decade, a shift dated to a 2017 peak in ICE (internal-combustion-engine) sales, after which global ICE sales fell roughly 30%. Three forces are reshaping this at different speeds by region: ethanol blending, which dents petrol's appeal even without electrification; CNG (compressed natural gas), a low-cost bridge fuel; and the rise of EVs and hybrids. Pace and cause vary by country; correlation shouldn't be mistaken for causation. Ethanol Blending: Meant to Help Petrol, Sometimes Hurting it Ethanol blending doesn't replace petrol cars outright — it changes what goes into the tank of a petrol car people already own, and reactions differ by market. India is the clearest recent case. After reaching a 20% ethanol blend (E20) nationwide roughly five years early, government studies by ARAI and SIAM reported a 2–6% drop in fuel efficiency, while many owners described steeper 7–8% drops plus corrosion and seal-wear complaints, especially in vehicles built before 2023. Two motorcycle makers and a fuel retailer warned older vehicles may need fuel-system changes. India's government disputes that wear is abnormal, citing trials showing no major issues, and the Supreme Court dismissed a legal challenge. Whichever claim is correct, the controversy had a measurable market effect: petrol's share of new Indian passenger-vehicle sales fell from about 59.4% to 53.3% over 2025, and slid to roughly 48% in July 2025 from about 52% a year earlier — a swing attributed largely to "E20 hesitation" pushing buyers toward CNG, hybrids and diesel, not necessarily EVs. The E20 effect looks more like a shift away from petrol than toward electrification specifically. Brazil shows the opposite pattern. Its ethanol system is decades old and well integrated: flex-fuel vehicles able to run on any gasoline–ethanol mix account for roughly 80–90% of new light-vehicle sales, using sugarcane ethanol typically priced 60–75% of gasoline. Because Brazilian drivers already have a cheap ethanol option in their existing petrol-compatible cars, flex-fuel ethanol has, per Bloomberg reporting, if anything slowed the shift to EVs by removing much of the incentive to switch powertrains. CNG: A Low-Cost, Infrastructure-Dependent Bridge Fuel CNG's growth concentrates where fuel prices meet existing gas infrastructure. In India, CNG's share of passenger-vehicle sales rose from 6.3% (FY2020) to roughly 22% (FY2026), overtaking diesel for the first time, driven by lower running costs, factory-fitted OEM models, and refuelling networks now covering 600+ cities; in states like Gujarat and Haryana, CNG has already overtaken petrol in new-car sales. Europe has a smaller, older CNG car market led by Italy (over 1 million vehicles, 1,400+ stations) and Germany. China has over 5 million CNG vehicles, mostly commercial. Growth is also emerging in gas-rich Middle Eastern markets and, via LPG, in Latin America (Mexico City's taxi fleet is over 60% LPG). Globally, CNG/LPG markets are forecast to grow roughly 5–13% CAGR through the early 2030s — modest next to EV growth, but regionally concentrated enough to move petrol's local share. EVs and Hybrids: The larger, more Volatile force Electric cars remain the biggest driver of the global ICE decline, though 2025–2026 data shows the trend is uneven. The IEA's Global EV Outlook 2026 estimates electric cars (battery plus plug-in hybrid) reached about 25% of global sales in 2025 and projects close to 28–30% for 2026, with China's new-car EV share nearing 60%, Europe around a third, and 75%+ growth in Latin America and non-China Asia. Chinese automakers supplied roughly 60% of global EV sales in 2025. The US shows how fast policy can reverse momentum. After the federal EV tax credit (up to $7,500) expired on 30 September 2025, US EV market share nearly halved — from roughly 10% to about 5% — while hybrids, often a lower-friction step for buyers, climbed toward 15–20% of the market, and gasoline vehicles' share ticked up in early 2026 by some measures. A regulatory change, not a shift in preference, moved the fuel mix here — a reminder that short-term swings shouldn't be read as reversing the longer downward ICE trend. Toyota's hybrid-first strategy — 4.4 million hybrids sold in 2025, nearly 40% of its global volume — shows hybrids, not only EVs, are steadily eating into pure-petrol demand, particularly where charging infrastructure remains a concern. Conclusion Petrol's declining global market share is real but not driven by one cause. Ethanol blending cuts both ways — in India it has, somewhat unintentionally, pushed buyers away from petrol through mileage and durability concerns, while in Brazil it has kept drivers loyal to petrol-compatible flex-fuel engines. CNG offers a straightforward but infrastructure-bound substitution effect in a few markets. EVs remain the largest long-run global force, but 2025–2026 data shows growth is uneven and reversible short-term when subsidies change, with hybrids often absorbing demand that might otherwise go to EVs — or stay with petrol. Regional context matters more than any global figure: the drivers, and their weight, differ between India, Brazil, China, Europe and the US.   Sources IEA, Global EV Outlook 2026 — https://www.iea.org/reports/global-ev-outlook-2026 IEA, Global EV Outlook 2026 — Executive Summary — https://www.iea.org/reports/global-ev-outlook-2026/executive-summary Business Standard, E20 effect: Petrol car market share dips, CNG leads alternative fuel charge — https://www.business-standard.com/industry/auto/e20-effect-petrol-car-market-share-dips-cng-leads-alternative-fuel-charge-126080602126_1.html Context (Thomson Reuters Foundation), Why is India's E20 ethanol fuel facing a driver backlash? — https://www.context.news/net-zero/why-is-indias-e20-ethanol-fuel-facing-a-driver-backlash CNBC, Hybrids 'having their moment' as car buyers rethink electric vehicles — https://www.cnbc.com/2026/05/19/hybrids-having-their-moment-as-car-buyers-rethink-electric-vehicles.html Bloomberg, Brazil's Beloved Sugar-Cane Cars Are Slowing EV Adoption — https://www.bloomberg.com/news/features/2023-07-19/why-brazil-is-falling-behind-in-the-electric-car-transition YouTube videos IEA — Global EV Outlook 2026 (official launch presentation) — https://www.youtube.com/watch?v=AcP43BmbVpc IEA — Global EV Outlook Technical Webinar — https://www.youtube.com/watch?v=co6YJ15uZyI News18 (N18V) — E20 Petrol Row: Dropping Mileage, Engine Damage Fears & SC Battle Over Ethanol Blending — https://www.youtube.com/watch?v=UHYd7S7PWPw Autocar India — Why CNG is becoming the fuel of choice for many | Deep Drive Podcast Ep. 54 — https://www.youtube.com/watch?v=nJjGFyzVtgE CNBC — China's Auto Takeover: BYD Vs. Tesla And The Battle For EV Supremacy (CNBC Marathon) — https://www.youtube.com/watch?v=KPd-zOdln04 CNBC — China's EV industry concerns. Here's what we know — https://www.youtube.com/watch?v=AOroWAUOtFs