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New Delhi, May 9, 2026 — A fresh lifecycle assessment from The Energy and Resources Institute (TERI) finds that compressed natural gas (CNG) currently carries a lower total environmental burden than electric vehicles (EVs) across most vehicle categories in India, mainly because the country's electricity grid remains heavily dependent on coal. The report compares petrol, diesel, CNG, electricity and LNG in six vehicle classes and takes a full lifecycle view that includes fuel production, vehicle manufacturing, operation and disposal.
In many markets, EVs are treated as the cleanest option simply because they produce no tailpipe emissions. TERI's report, "Comparative Assessment of Vehicular Fuels in India's Energy Transition," argues that this operating-phase-only perspective can be misleading. The study measures climate change potential, particulate matter, human toxicity, water consumption, fossil fuel depletion and mineral/metal use across the entire vehicle and fuel chain.
When those indicators are combined, the current ranking does not put EVs first in every segment. Because thermal power stations still supply most of India's electricity, the emissions from running an EV are partly shifted to the power plant. Add the resource use and processing impacts tied to battery manufacturing, and EVs' overall environmental burden rises above CNG for many vehicle types under today's grid conditions.
The study is careful not to treat this as a permanent verdict. It models the same vehicle categories out to 2030, 2040 and 2050, so the relative ranking can improve as India's electricity mix becomes cleaner and as battery production scales up.
TERI's findings are highly segment-specific.
For two-wheelers and three-wheelers, EVs remain the most attractive option. Lower running costs and high daily utilisation help make up for higher upfront battery costs. These segments are widely seen as the most promising near-term targets for India's EV transition, particularly for urban riders and last-mile delivery.
For passenger cars, taxis, buses and light commercial vehicles, CNG currently offers the strongest balance of environmental, economic and operational performance. Price-sensitive fleet operators and commuters get lower environmental impact per mile on a lifecycle basis than they would from EVs charged on the current grid, according to the study.
The heavy-duty segment is more complicated. The report says CNG should remain relevant for regional freight movement; LNG could play a larger role in long-haul transport; and battery-electric trucks are likely to remain suitable for selected applications, not for the whole sector.
It is no surprise that electricity generation dominates the comparison. When an EV is charged with electricity from a coal-heavy grid, the emissions related to the vehicle's operation do not disappear; they just move from the vehicle's tailpipe to the power plant. The lifecycle framework also captures upstream fuel extraction, refining and distribution emissions for petrol, diesel, CNG and LNG.
TERI's conclusion is that CNG "generally demonstrates the lowest overall environmental burden across most vehicle categories" on current Indian grid inputs. That wording matters: it reflects a specific national power mix and a specific battery supply chain, not a general global conclusion.
The same logic applies to the U.S. debate. EVs in California or the Pacific Northwest are charged with much cleaner electricity, which narrows or reverses the gap. In states that still rely heavily on fossil fuels, lifecycle emissions from EVs are less clearly better than efficient natural-gas vehicles. The TERI methodology is a reminder that grid mix and manufacturing footprint should be part of the policy discussion, not just tailpipe ratings.
India has a strong strategic reason to push EVs: it imports most of the crude oil it refines into petrol and diesel. Electrification reduces that import bill, but it creates a different kind of import dependence. Lithium, cobalt, nickel and graphite are essential for lithium-ion batteries, and global supply chains are heavily concentrated in a few countries.
TERI flags this as a major geopolitical consideration. The report examined not only technical and environmental factors but also economic, social and geopolitical ones. The implication is that India's EV strategy cannot simply swap one import dependency for another; it needs secure raw-material partnerships, battery recycling efforts and domestic manufacturing capacity.
The International Energy Agency's 2025 Global EV Outlook makes a similar point. It warns that critical-mineral availability, refining capacity and supply-chain concentration could become bottlenecks for the global EV ramp-up. For the United States, that concern is already embedded in federal EV tax credits that require more domestic sourcing of battery minerals and components.
India has been accelerating EV adoption through the PM E-DRIVE scheme, which supports electric vehicles and charging infrastructure, including an allocation of ₹2,000 crore (about $240 million) for public charging stations. The central government has also pushed local manufacturing under the broader "Make in India" agenda.
The TERI study does not argue that India should freeze CNG in place. Its message is that there is no single fuel or powertrain that performs best across every vehicle category and every criterion. A smart transition plan, the report suggests, will keep the menu pluralistic: EVs for short-distance and urban use, CNG/LNG for freight and taxi operations, and continued efficiency improvements in petrol and diesel where consumers have no affordable alternative.
That differentiated approach is not a retreat from zero-emission transport. It is a way to maximise real environmental gains today while building the cleaner grid and domestic battery ecosystem that will make EVs the obvious choice in the future.
The TERI analysis is the latest evidence that "clean" depends on where energy comes from and how the car is made. For Indian buyers and fleets, CNG is close to a practical low-carbon option right now. For EV advocates, the study is a roadmap of what still needs to change: decarbonise the grid, shrink the battery footprint and diversify the mineral supply chain.
The report's central message is simple. Tailpipe emissions matter, but they are not the whole story. Governments designing vehicle incentives need to look at the full lifecycle, and they need to be honest about the trade-offs. As TERI puts it, no single fuel will do all the work in India's energy transition.
