West Asia conflict: EV cost edge sharpens amid rising fuel prices

Petrol, diesel have seen cumulative hike of ₹5 per litre in May

The West Asia crisis has put the economics of electric vehicle (EV) ownership back in focus, with rising fuel-price concerns nudging Indian car buyers to look beyond upfront purchase prices and assess the total cost of ownership. 

India has seen cumulative petrol and diesel price hikes of roughly ₹5 per litre in May after global crude prices surged amid the West Asia conflict and disruptions in ship movement via the Strait of Hormuz. 

Industry executives say the shift towards EVs is no longer being driven by sustainability, technology appeal or government incentives alone. Increasingly, buyers — especially urban users with high daily running — are calculating monthly fuel bills, five-year operating costs and resale assumptions while evaluating both new and used vehicle purchases. 

That consumer shift is already visible in retail trends. According to the Federation of Automobile Dealers Associations (Fada), EVs accounted for 4.25 per cent of passenger vehicle (PV) retail sales in 2025-26 (FY26), up from 2.61 per cent in FY25. The momentum continued into FY27, with EV share in PV retail sales rising to 5.77 per cent in April 2026 from 3.70 per cent a year earlier. 

Fada also that flagged fuel-price concerns are influencing buying behaviour. In its March 2026 retail outlook, the dealers’ body said 36.5 per cent of dealers reported rising or expected fuel prices were moderately to significantly affecting customer purchase decisions. They could shift preferences further towards CNG (compressed natural gas) and EV options. 

Illustrative calculations by industry sources for PVs in the ₹11-12 lakh range show that while EVs carry a marginally higher upfront cost than petrol and CNG vehicles, the operating-cost advantage over time is becoming increasingly significant.

The economics, however, remain uneven across buyer segments. Ravi Bhatia, president of analytics firm Jato Dynamics, said EV adoption is still constrained by limited model choices in the belly of the car market, charging friction, real-world range impact from speed and air-conditioning load, and uncertainty over resale value as battery and drivetrain technologies evolve.

Bhatia added that EVs are gaining traction as second cars in urban households, especially among users with predictable daily driving patterns and access to home charging. 

Anurag Singh, managing director at Primus Partners, said EV transition is likely to continue regardless of West Asia crisis, because it is being driven by structural factors such as falling battery costs, policy support and improving infrastructure. However, sustained higher fuel prices could modestly accelerate adoption by improving the cost advantage of EVs, particularly in price-sensitive markets like India, he said. 

Yet, for many EV buyers — especially in the used-car market — the decision is still shaped as much by trust and predictability as by operating economics. Questions around battery life, charging reliability and resale value continue to influence purchases.

The resale question remains one of the biggest unresolved parts of EV ownership economics. Niraj Singh, founder and chief executive officer of used-car marketplace Spinny, said there was a noticeable residual-value gap initially, especially with first-generation EVs, but that gap is steadily narrowing as awareness improves, charging infrastructure expands and original equipment manufacturers support the resale ecosystem. 

Singh said customer concerns around used EVs are largely centred on battery health, driving range, charging reliability and long-term ownership confidence. 

But Primus Partners’ Singh sounded a more cautious note on long-term valuations. He said EV resale values remain relatively weak and difficult to assess because technology is evolving rapidly, causing older models to depreciate faster. 

For now, CNG remains the strongest conventional alternative to EVs on ownership economics.

 

Fada data shows CNG’s share in passenger vehicles stood at 22.62 percent in April 2026, while petrol’s share was 45.95 percent and diesel’s 17.39 percent. 

If fuel prices remain elevated, consumers are likely to increasingly evaluate vehicles not just by sticker price, but by monthly running cost, charging access, resale confidence and usage pattern. 

For EVs, the West Asia crisis may not be the reason the transition began, but it has made the cost advantage significantly harder for consumers to ignore.