Bajaj Auto's ambitious venture into CNG-powered motorcycles is facing significant headwinds, with sales of its Freedom 125 CNG bike plummeting due to a reduced price difference between CNG and petrol, coupled with increasing availability challenges stemming from the West Asia crisis.
Key Points
- Bajaj Auto's Freedom 125 CNG bike registrations have plummeted from 12,167 in November 2024 to 1,211 in May this year.
- The primary reason for the sales decline is the shrinking price difference between CNG and petrol, now only Rs 25 per kg per litre.
- Rising CNG prices, influenced by the West Asia crisis and rupee depreciation, have made the fuel more expensive.
- Availability issues, including long queues at CNG stations, further dampen the market for CNG motorcycles.
- Despite initial promise and lower running costs, the segment faces significant headwinds, impacting Bajaj Auto's market plans.
India’s tryst with selling compressed natural gas (CNG)-powered motorcycles is faltering, thanks to the reduced price arbitrage between petrol and CNG and growing challenges over availability due to the West Asia crisis, as most of the gas is imported from that region.
Bajaj Auto, the only player in the segment, which launched the Freedom 125 CNG bike in July 2024, has seen registrations plummet from a peak of 12,167 vehicles in November 2024 to a mere 1,211 vehicles in May this year.
In June it has been able to register only 970 vehicles.
Dramatic Decline in Sales
Yet, in 2024, CNG-powered bike sales boomed, with Bajaj registering as many as 38,235 vehicles in just six months starting from July.
In the full year of 2025, it managed to register 42,235 vehicles.
But the fall has been dramatic, with registrations dropping to 8,483 vehicles in calendar year 2026 so far.
Rakesh Sharma, joint managing director of Bajaj Auto, admits the challenge. He says, "The development of the CNG option in motorcycles, which we have been spearheading, is facing the challenge of reduced arbitrage between CNG and gasoline, and now, of course, its availability."
Shrinking Price Arbitrage and Availability Concerns
The reason for the plummeting sales has primarily been rising CNG prices, as a result of which, the gap between CNG and petrol has shrunk from Rs 32 when the product was launched to only Rs 25 per kilogram (kg) per litre now.
When the model was launched, CNG was priced at ₹75 per kg, while petrol was at ₹107 per litre. However, in May this year, CNG in Mumbai rose to Rs 86 per kg, while petrol rose to Rs 111.21 per litre.
The West Asia crisis and the depreciation of the rupee -- as CNG is imported -- have only made it more expensive. Apart from that, the crisis has affected CNG availability, with long queues reported in many cities — a major dampener for this category.
Even today, the total number of CNG stations across the country, though growing to around 8,600, remains small compared to more than 100,000 petrol pumps.
Initial Promise and Future Outlook
The CNG-powered motorcycle came with a lot of promise, and Bajaj rivals like TVS Motor Company and Hero MotoCorp were also contemplating entering the space.
During the launch, Bajaj had focused on the 45 per cent lower running cost of a CNG motorcycle compared with petrol -- a big plus for riders. It had also pointed out that with CNG available in over 335 cities across the country, fuel availability would not be an issue.
The company also made plans to enter the CNG scooter market.
In terms of the potential size of the market, the company had said that CNG motorcycle sales would mirror the share of electric vehicles (EVs).
It, of course, had other pluses too -- it helps reduce carbon emissions, and to ensure that range is not an issue, Bajaj also fitted a small petrol tank that could power the motorcycle for some distance.
