India Flexfuel Cars Market Dynamics, Regulatory Frameworks, Growth, Challenges, Opportunities forecast to 2030

CALIFORNIA, UNITED STATES, December 6, 2023 /EINPresswire.com/ -- Flexfuel vehicles, also known as dual-fuel vehicles, have an internal combustion engine capable of running on more than one fuel, usually gasoline blended with either ethanol or methanol fuels. In India, flexfuel cars can run on a blend of gasoline and bioethanol up to 85% ethanol.

Market Dynamics:

India has mandated that all vehicles be compatible with E20 fuel (20% ethanol, 80% gasoline) from April 2023. This move is aimed at reducing reliance on imported oil and curbing vehicular emissions. Higher blend ethanol like E85 can considerably reduce emissions. Further, growing production of bioethanol in India, driven by government policies and investments in new distilleries, is increasing the availability of lower-cost, cleaner fuel. This is expected to boost adoption of flexfuel vehicles in the country during the forecast period.

According to Coherent Market Insights study, The India Flexfuel Cars market size was valued at US$ 611.8 million in 2023 and is expected to reach US$ 1,627.4 million by 2030, grow at a compound annual growth rate (CAGR) of 15% from 2023 to 2030

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Market Drivers

Growing Demand for Energy Security in India is Driving the Adoption of Flexfuel Cars

India imports around 80% of its crude oil requirements which makes the country heavily reliant on imports. This dependence on imports exposes the economy to volatility in global oil prices. Flexfuel cars have the ability to run on different blend of petrol and ethanol which provides an alternative fuel source to petrol. As ethanol can be produced locally from sugarcane and other crops, its use helps in reducing reliance on imports and enhances energy security. The growing energy security concerns in India are a major driver for OEMs to introduce more flexfuel cars in the market.

Rising Fuel Price is Increasing Attractiveness of Flexfuel Technology

Fuel prices in India have witnessed a sharp rise in recent years due to rising crude oil prices in international markets and increase in domestic taxes. High fuel cost impacts individuals as well as commercial transport operators. Flexfuel vehicles have an advantage that they can seamlessly switch between petrol and ethanol depending on fuel price differential. As ethanol prices have remained lower than petrol, flexfuel technology provides savings opportunity for users. The rising disparity between prices of petrol and ethanol is making flexfuel cars an economically viable solution. This is a major factor fueling adoption among price sensitive users.

Market Opportunity: Government Support Measures are Creating Conducive Environment

The Indian government has realized the strategic importance of expanding ethanol use in the country. It is promoting production of ethanol from various feedstocks and setting an ambitious ethanol blending target of 20% by 2025. Several initiatives such as fixed price policies, interest subvention, and expansion of sugarcane areas are transforming ethanol into a viable business. The government is also incentivizing adoption of flexfuel cars through lower GST and income tax benefits. Such support measures are improving the investment climate and making flexfuel vehicles financially appealing. As policy push continues, it will open bigger market opportunity for flexfuel car manufacturers and technology providers.

Market Trend: Rising Popularity of SUV Segment is Driving Manufacturer Interest

SUV segment has emerged as one of the fastest growing vehicle categories in India in recent years. Their higher fuel efficiency makes SUVs a preferred choice for customers looking at value for money. Leading carmakers have realized the business potential of this segment and are focusing on strengthening their SUV portfolio. Flexfuel technology is strategically relevant for SUVs as their user profile matches with potential adapters. OEMs are hence proactively working towards introducing flexfuel versions of their popular SUV models. This rising prioritization of SUVs is one of the defining trends that will steer future growth of flexfuel cars in India. Leading players are readying flexfuels SUVs to capitalize on projected uptick in demand.

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Market Restrain: Limited Availability of Ethanol Supply Infrastructure is Hindering Wider Adoption

For flexfuel vehicles to deliver on their full potential, adequate ethanol supply infrastructure is critical. However, ethanol supply infrastructure in India is currently limited to few states where sugarcane is widely grown. This restricts flexfuel car owners to certain regions for availing lower ethanol prices. Absence of pan-India ethanol supply infrastructure poses refueling challenges. It demotivates potential customers from opting for flexfuel cars due to uncertainty over fuel availability across locations. Unless ethanol supply chain and dispensing network is expanded nationwide, limited fuel availability will continue to restrain faster uptake of the technology.

The major players operating in the market include:

➱ Maruti Suzuki
➱ Hyundai
➱ Tata Motors
➱ Nissan
➱ Renault
➱ Mahindra & Mahindra
➱ Toyota
➱ Honda
➱ Ford
➱ Volkswagen

These companies are focusing on new product development, partnerships, collaborations, and mergers and acquisitions to increase their market share and maintain their position in the market.

India Flexfuel Cars Market Segmentation:

By Fuel Type
◘ E85
◘ E100
◘ Flex-Fuel
◘ Dual-Fuel
◘ Others

By Vehicle Type
◘ Passenger Cars
◘ Commercial Vehicles
◘ Two-Wheelers
◘ Others

By Technology
◘ Engine Design
◘ Fuel Injection System
◘ Fuel Tank & Delivery Module
◘ Flexible Fuel Sensor
◘ Others

By Distribution Channel
◘ OEMs
◘ Aftermarket

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Frequently Asked Questions (FAQs):

➱ What are the key factors hampering growth of the India Flexfuel Cars market?
➱ What are the major factors driving the global India Flexfuel Cars market growth?
➱ Which is the leading component segment in the India Flexfuel Cars market?
➱ Which are the major players operating in the India Flexfuel Cars market?
➱ Which region will lead the India Flexfuel Cars market?
➱ What will be the CAGR of India Flexfuel Cars market?
➱ What are the drivers of the India Flexfuel Cars market?

Mr. Shah
Coherent Market Insights Pvt. Ltd.
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