Why India Is Pushing Flex-Fuel Cars Alongside Electric Vehicles
India is intensifying its push for cleaner mobility. The government has already issued draft rules to formally introduce E85 (85% ethanol blended petrol) and E100 (nearly pure Ethanol). Clearly, the nation is betting big on flex fuel technology. Many believe it will beat EVs in the coming years.
Flex fuel is essentially higher blends of Ethanol or pure Ethanol being used as fuel. These are not suitable for use on regular vehicles. When implemented, E85 and E100 fuels will have separate storage tanks and dispensers at bunks.
For users, the refuelling process would be mostly similar to conventional refuelling. It will take just the same amount of time as well. No long queues, long charging times or infinite waiting.
More importantly, they don’t require ‘charging’ of any sort. Plug-in hybrids, another innovative technology that is currently waiting in the wings, requires the car to be plugged in- something that can be a concern to at least some owners, particularly the ones living in gated communities or apartments.
Of late, we have come across multiple cases of EV owners undergoing painful ownership after facing issues with home-charging facilities. Many owners were denied permission to install AC chargers in basement parking. Such hassles won’t be there in the case of FFVs.
Flex Fuel Vehicles (FFVs) do not require separate infrastructure like EVs. Existing petrol bunks can be modified to enable them. All these would make their adoption quick.
Flex fuel-hybrids will make the deal sweeter. These combine flex-fuel engines with electric motor and battery packs, and offer impressive fuel efficiencies. These will further add to the acceptance of this technology.
And finally, we don’t expect FFVs to cost as much as electric vehicles. They will likely retail at lower price points, especially with EV subsidies now being reduced in stages. Lower upfront costs will attract even more people to flex fuel vehicles in the future.
The ethanol lobby is pushing hard for increased blending and flex fuel vehicles. The recent draft rules can be seen as a sign that the government also plans to take a similar direction. If so, FFVs will soon get strong policy backing.
There are several reasons to believe that the government will promote FFVs. The most important one is that a shift to FFVs will benefit the Ethanol industry and increase farmers’ income. For the government, they are an important vote bank.
More importantly, the use of pure Ethanol or higher blends as fuel will help curb India’s dependence on pure petrol. The country is now heavily dependent on imported crude for its fuel needs. This will change, eventually resulting in massive financial savings. Since Ethanol is made from renewable sources like grains and sugarcane, blended fuel and flex fuel are also renewable. FFVs becoming popular can eventually make India self-reliant in energy.
The GST on flex fuel may also be reduced in the future. FFVs are now taxed at 28%. The Grain Ethanol Manufacturers Association has requested to lower this to 5% while Union Minister Nitin Gadkari had previously called for a reduction of GST on FFVs to 12%.
For automakers, the shift to flex fuel technology is not an option, but a necessity. Many leading manufacturers are already testing their flex fuel models. We recently saw Royal Enfield testing the E85 compliant version of Classic 350. Other two wheeler majors like TVS Motor Company and Bajaj Auto have also made significant progress with their flex fuel vehicles. Toyota and Maruti Suzuki have already showcased flex fuel versions of popular models like the Hycross and Fronx.
The upcoming CAFE III norms are, in a way, catalysing the shift to FFVs. The Volume Derogation Factor (VDF), a multiplier that defines CAFE targets, is the primary reason. Under the draft CAFE 3 norms, EVs and range-extender hybrids (PHEVs) have VDF values of 3 and 2.5 respectively. For flex fuel vehicles, it falls in the range of 1.1-1.5.
All-India Distillers' Association (AIDA) has written to the Ministry of Petroleum and Natural Gas, asking to increase it to 2.5. Once this goes through, flex fuel vehicles will be as important as electric vehicles for manufacturers, in meeting their CAFE targets. Flex fuel hybrids would then have VDF values of over 3- equal to or slightly more than that of pure EVs.
And finally, a shift from EVs to flex fuel vehicles will reduce manufacturers’ dependence on China. Even today, automakers depend heavily on China for EV powertrains. Shifting to flex fuel will clear this, except in the case of hybrids.
For hybrids, the battery manufacturing scene is set to witness a major evolution as majors like Tata Group and Reliance Energy are investing heavily in this sector. All these will make manufacturers innovate more in the flex fuel space and come up with more FFVs in the future.