For decades, the story of Indian cars has been petrol, diesel and CNG. Then came electric cars, which radically changed the industry and promised cleaner mobility. Now, another competitor is pulling into the fast lane: flex-fuel vehicles (FFVs), which run not just on gasoline but also on ethanol drawn from India’s massive agricultural economy.
In 2026, India will see a slew of new car launches and two-wheelers that can run on up to 100% ethanol. Although work on FFVs has been ongoing for some time and some prototypes were showcased at the Bharat Transport Expo 2025, the West Asian crisis has accelerated the shift as policymakers look to ensure energy security amid rising crude oil prices. To launch FFVs that can run on up to 100% ethanol, the Ministry of Road Transport and Highways in April included E100 (pure ethanol) in the testing and certification standards for vehicles.
“Any product that can contain anything above 85% ethanol cannot be classified as FFV. This has been removed. It opens up the possibility for E100 as well,” says Vikram Gulati, country head and executive vice president, corporate affairs and governance, Toyota Kirloskar Motor.
Although the E20 fuel mandate was rushed, FFVs have industry support. The blueprint already exists, and it comes from Brazil, one of the world’s first and most successful adopters of these vehicles.
With the introduction of FFVs, the government may not have to increase the base ethanol blending rate, says Gulati. “In Brazil, while the base blend remains E27, the national average blend has risen to up to 50% with FFVs,” he says. These vehicles represent about 90% of new car sales in Brazil, the second largest ethanol producer in the world after the United States.
“In Brazil, ethanol consumption after the introduction of FFVs was a J-curve, where enablers were put in place. Consumers found an economic justification for using ethanol instead of their base blend,” says Gulati. With FFVs, concerns about corrosion and mileage loss are resolved, he says. “It’s a common-sense solution for our country. It’s best for all stakeholders: consumers, oil marketing companies, government, ethanol producers, and automakers.” Flexible fuel engines can be run on 100% ethanol. They automatically detect ethanol content and adjust performance.
India story
In 2024, Honda Motorcycle & Scooter India will launch the E85-powered CB300F Flex Fuel motorcycle. Suzuki will launch the Gixxer SF 250 at the Bharat Mobility Expo in 2025. TVS Motor and Bajaj Auto also showcased prototypes of the flex-fuel motorcycles. Royal Enfield, maker of the Bullet and Classic motorcycles, is also gearing up its portfolio for a higher blend of ethanol.
“We have been exporting to Brazil for more than 10 years,” says P Govindarajan, Managing Director, Eicher Motors Ltd and CEO, Royal Enfield. “We have one product ready, the Classic 350, with flex-fuel compatibility. We are now looking at the rest of our product line. The moment the infrastructure is ready for FFVs, we will be ready with the products,” says Govindarajan.
Hero MotoCorp, the country’s largest two-wheeler manufacturer, launched its first flex-fueled two-wheeler on June 3 – Hero HF Deluxe Flex Fuel and Hero Splendor Plus Flex Fuel. “Many OEMs are ready with products. One can expect more announcements in the near future,” Harshavardhan Chitale, CEO, Hero MotoCorp, said in an interview with Business Today.
FFVs can not only reduce CO2 emissions but can also reduce India’s dependence on imports of fuel and battery cells. Ola Electric is the only company that manufactures battery cells in India and that too to meet its own needs. Electric cars from all major brands have imported battery cells. “For energy resilience and clean mobility, we need to look at multiple sources, as electric vehicles have limitations due to dependence on one country (China). Hence, we are actively focusing on FFVs,” says Chitali.
The focus on FFVs also comes at a time when the share of electric vehicles in new two-wheeler sales has been stagnant at around 7% over the past two years. “Our ability to ramp up FFVs is much higher than the ability to penetrate electric mobility. For electric vehicles, we need to solve many other challenges facing the ecosystem, while with ethanol, the industry can quickly move to FFVs. This is green from cradle to grave and completely Atmanirbhar“Says Chitali.
For automakers too, the timeline for the rollout is months away, says Toyota’s Gulati. “This is the time one needs for testing and homogeneity certification,” he says. Toyota is currently running a flex-fuel pilot with its powerful hybrid SUV, the Innova Hycross. Maruti Suzuki India Limited launched the country’s first flex-fuel car – Wagon R – which can run on up to 100% ethanol on June 4. “There are three pillars that if combined can help FFVs take off in a big way. The vehicle, the fuel distribution network, and the price of ethanol in relation to gasoline. Pillars one, two and three are at least partially possible immediately,” says Rahul Bharti, senior executive director, corporate affairs. Maruti Suzuki.
Tata Motors Passenger Vehicles is targeting to launch its first FFV by early next year. “We are very comfortable in terms of technology readiness. We should be ready with at least one product by the end of this year or early next year,” says Shailesh Chandra, MD & CEO, Tata Motors Passenger Vehicles.
Renault is also all set to drive FFVs in the country. “We are fully prepared. In Brazil, we have been selling FFVs for more than 15 years,” says Francisco Hidalgo, Vice President Sales and Marketing, Renault India.
Will buyers accept the deal?
The introduction of E20 fuel has already drawn criticism from car owners due to the lack of an E10 fuel option. Convincing car buyers who are already concerned about losing mileage due to ethanol will be a daunting task.
Many industry experts said Business today E85 would have to be at least 30% cheaper than conventional gasoline to make economic sense for consumers as ethanol has about a third less energy than gasoline. In its recommendations to the government five years ago, the Society of Indian Automobile Manufacturers (SIAM) had suggested that E100 could only work when it cost 30% less than petrol.
Currently, the price difference between E20 and E85 is only about 20%, making them less attractive to buyers of flex-fuel vehicles. E85, which has been introduced at select petrol pumps in Delhi, costs Rs 82 per liter compared to Rs 102.12 per liter for E20 petrol.
The industry is asking policy enablers to encourage consumers to adopt these vehicles, says Toyota’s Gulati. “From a customer perspective, the technology has to make sense from a total cost of ownership point of view, just as it does with an electric battery,” he says.
Gulati highlights two immediate challenges: high upfront cost and lost miles. “FFVs cost around Rs 50 lakh more than a conventional ICE car. With the same GST and road tax rates, the price difference doubles,” he says.
Maruti Suzuki’s recently launched flex-fuel vehicle, WagonR Bioflex, is priced at Rs 7,23,900 (ex-showroom). It costs Rs 85,000 more than a similar petrol car. However, the difference is not much in the case of two-wheelers. Hero MotoCorp’s flex-fuel vehicles cost only about 4% more than conventional petrol models.
The second challenge is operations. “There is a loss in mileage because the energy density of ethanol is lower,” says Gulati. “The price of ethanol should be much lower than the price of gasoline.”
Without a meaningful price advantage over gasoline, the trade-off in mileage can make consumers reluctant to switch. “The consumer may end up being penalized for purchasing technology that is cleaner than gasoline,” Gulati says.
There is also the issue of infrastructure such as distribution machines. The CAFE III draft standards reduced super credits on FFVs from 1.5 to 1.1. That’s still lower than powerful hybrids, which score 1.6, and electric vehicles, which score 3. Super credits are regulatory multipliers that allow automakers to artificially inflate the sales volume of clean, low-emission vehicles when calculating their total fleet-wide emissions.
“Fleet emissions standards must recognize the potential and contribution of ethanol not only as a 100% replacement for gasoline but also as a carbon replacement. If this is not done, it will be very difficult for OEMs to introduce FFVs,” says Gulati. OEMs and the government are talking about all these enablers, he adds.
FFVs are unlikely to generate significant volumes in the near term due to limited availability of models and the need for a nationwide network of dispenser pumps, Maruti Suzuki’s Bharti told analysts during the company’s Q4FY26 earnings call. “We need more models,” he says. “We need energy-based parity between ethanol and gasoline prices. It’s a plan for the future. Volumes will be minimal at this point. They will grow, say, five to 10 years from now.”
For consumers, E100 vehicles could cost 3-8% more due to ethanol-resistant components, while higher fuel economy may offset the savings from cheaper ethanol, says Ravi G Bhatia, president and director, JATO Dynamics India. However, Bhatia warns that an early push toward E100 could strain automakers’ capital allocation and potentially slow EV adoption by shifting investments and policy focus.
Hero’s Chitale, on the other hand, aims to increase the biofuel content in the energy mix. “It is a sure way to make ourselves ‘self-reliant’,” says Chitali. “We are all for it, whether it is through E25 or by quickly switching to E85 and E100.”
Industry leaders say the debate over India’s shift to clean mobility cannot be boiled down to a single technology. By 2030, India’s automobile market is expected to swell to nearly six million cars annually. Even in the most optimistic scenario, EV penetration may only reach about 20%. This still leaves approximately 4.8 million ICE vehicles.
As millions of new internal combustion engine (ICE) vehicles continue to hit Indian roads this decade, the country’s dependence on imported fossil fuels may deepen rather than decrease. The International Energy Agency has already ranked India as a major driver of future fossil fuel demand growth, predicting that more than a third of global oil demand growth could come from India.
“This scenario would be catastrophic not only for the environment, but also for the economy,” says Toyota’s Gulati. “The Canadian dollar would rise to its highest levels.” He adds: “If you switch to electric cars, you increase the import bill for electric vehicle parts. This will decrease when localization occurs. But this, too, will take some time.”
There is no doubt that farmers’ farms will increase ethanol consumption, leading to improved farmers’ income. But only time will tell if this is successful in India. While people can sit in their drawing rooms and want to convert energy, it is the consumer who ultimately has to make it happen.
@karandar
