With the government announcing plans to further increase the percentage of ethanol (distilled from sugarcane or grains) blended into petrol, those planning to buy new vehicles—especially cars and two-wheelers—are in a state of total confusion. With Maruti Suzuki introducing a WagonR capable of running on 85% ethanol and 15% petrol (E85), and pumps selling such fuel launching in Delhi, the automotive market is watching closely to see what happens next.

When "flex-fuel" vehicles capable of using 85% or even 100% ethanol hit the market, there will be no concern about using that fuel. The issue, however, is the necessity of using ethanol-blended petrol in current, standard petrol vehicles. Even vehicles that were released before the era of ethanol are now required to use petrol blended with 20% ethanol. While manufacturers claim that new cars are capable of using E20 (20% ethanol) petrol, efforts are already underway to introduce E30 petrol soon. Concerns such as reduced mileage and the water content in ethanol causing corrosion in pipes and joints are already prevalent.

There should be four distinct fuel categories alongside electricity: Petrol, CNG, Ethanol, and Diesel.

Pros and Cons

Although petrol is expensive, using a petrol vehicle is the least troublesome with lower engine maintenance costs. CNG vehicles are notable for their high mileage, but there are many places where CNG is hard to find. The high mileage of diesel is attractive, but maintenance costs are slightly higher due to the need for filters and urea fluid to comply with current pollution control norms. Furthermore, the purchase price of diesel vehicles is higher compared to petrol models. Ethanol does not offer the same mileage as petrol, even if the price is slightly lower.

Buyers are overwhelmed by these varied anxieties. There is also widespread misinformation circulating, with rumors suggesting that diesel vehicles will not be permitted beyond the next 15 years. It is a significant source of confusion when certain fuels are opposed and the government mandates ethanol blending in petrol. This undermines the basic fairness of allowing customers the opportunity to choose fuel options based on their usage patterns.

 Hybrids and EVs

Although electric cars account for 6% of the total car market sales, people still do not have full confidence in them. While Chinese companies are ahead of any other country in the EV sector, strict regulations on Chinese firms in India have stunted the growth of companies like MG and BYD. This government policy has greatly benefited Tata and Mahindra. While Maruti and Hyundai are nominally present in the electric field, they remain far behind Tata and Mahindra.

Higher prices compared to petrol/diesel cars, "range anxiety," inadequate charging infrastructure, the time lost waiting for charging, and various technical glitches keep people away from electric cars.

Amidst this confusion, hybrid cars have recently come into focus. These are cars equipped with a petrol engine and an electric (battery) motor. Currently, Toyota, Honda, and Maruti Suzuki offer hybrid (self-charging) models, and the Renault Duster Hybrid is expected later this year.

A hybrid typically costs about 25% more than a standard petrol car, but the mileage increases proportionately. Even in hybrids, the efficiency of petrol remains the primary consideration; the electric motor acts as a technology to boost mileage.

The situation may change with the arrival of "plug-in hybrid" models, which can be charged like electric cars. In these, the petrol engine will primarily act as a generator to charge the battery. However, if these models are imported, they will be very expensive. Furthermore, while Chinese companies possess this technology, they face restrictions on investment in India, a hurdle that companies like BYD and MG are currently struggling with.