EV vs Ethanol – The Future of the Auto Industry

Electric vehicles are growing in India and various Government initiatives are also supporting but the main problems are lack of charging infrastructure, high initial cost, and lack of electricity produced from renewable energy whereas Ethanol is already in the market through blending percentage in petrol. In January 2021, the target of achieving 20% ethanol- blending was pre-poned to 2025 from 2030. The blending of ethanol has increased to 9.45% in FY2021-2022 from 8.5% blending achieved in FY2020-2021. Thus, blending has increased by over 11% in the current financial year. Moreover, the recent press conference by Mr. Gadkari to sugar companies “Jitna dum hai utna ethanol banao”…no dearth of demand.

The country will require 1,016 crore litre of ethanol for blending in petrol in 2025 to fulfill the target of 20% ethanol blending and as per the report by the government on ‘Roadmap for Ethanol Blending in India 2020-25’, 50% of ethanol requirement will come from the sugar industry and rest from grain and other sources. However, electric vehicles can also run on electricity produced from fossil fuels, the overall efficiency of electric vehicles is still higher and the pollution is less because large thermal power plants are much more efficient and it is easier to control emissions from power plants than vehicles engines.

EV Vs Ethanol – The Future of the Auto Industry

Then the question arises why we do not just focus on Electric vehicles? The answer is that a net positive contribution would require a long-term change in energy supply infrastructure and if we assume that most of today’s electric cars may be powered by coal-produced electricity then it may beat the purpose. However, Infrastructure in many ways could be easier and more cost-effective to build for ethanol than for electric cars and filling stations can serve hundreds of users at one time.

By contradiction, most users may charge electric cars at home, and in line with that GM deliberately designed the Volt so that it could be charged with an ordinary household outlet. Meanwhile, the public charging networks needed to complement home charges which could be costly. Moreover, prices of commodity items used in manufacturing automobiles, including steel, aluminium, copper, zinc, rubber, platinum, palladium, and rhodium, have become increasingly volatile in recent years. Semiconductor shortages have also impacted the auto industry adversely. Many major automotive companies have been experiencing a shortage of semiconductors, used in the production of automotive chips and charging or other components of electric vehicles.

Road Map for Ethanol Blending - E20


FLEX FUEL ENGINES & ETHANOL PUMPS SOON: Flex engines by 4-wheelers will be ready in the next 6 months and 2-wheelers have already developed flex-fuel engines. Bajaj Auto is already ready with their flex engine-driven auto rickshaw models while the company along with TVS are already making use of flex engines in two-wheelers. Toyota, Suzuki, and Hyundai have also announced that it would bring flex engines. According to Mr. Gadkari, the public will see more ethanol pumps in the future. Additionally, recently, PM has inaugurated three E100 ethanol dispensing stations in Pune under a pilot project. From auto rickshaws to high-end cars, all vehicles will be able to run on ethanol soon.

Moreover, he further said that the government will soon come up with an advisory on flex engines for automobile makers that will allow the manufacture of vehicles that would run both on petrol and 100% ethanol. Further, a lot of research is also carrying towards ethanol usage for future green energy and it is believed that Ethanol would pave the way for more green energy. Bio-CNG & Hydrogen are the next big steps for green energy. BPCL is in the process of setting up three 2G Ethanol Bio-Refineries in the states of Orissa, Madhya Pradesh, and Maharashtra. The Bio-Refineries are expected to produce Ethanol 100 KL per day using lignocellulose biomass as feedstock (rice straw/maize stalk) using indigenous technology. The 2G Ethanol produced, will be used for blending in Motor Spirit (Petrol).

Also Read: Top 7 Electric Vehicle (EV) Stocks in India

Even though there are lots of hindrance to the availability of infrastructure related to electric vehicles various e-commerce companies, car manufacturers, app-based transportation network companies, and mobility solution providers has already entered the sector and are slowly building up electric car capacity and visibility.

In the financial year 2022, Tata Motors reported tremendous growth in their electric vehicle sales. As per data released by the homegrown automaker, Tata reported the highest-ever annual EV sales of 19,106 units in FY22, up by 353 percent as compared to FY21. The Nexon EV is currently the most popular electric car in India, and also the single largest selling electric car. Tata is also planning to launch the updated Nexon EV soon with an extended range. Also, Tata Altroz EV is on the cards.

The Government of India has encouraged foreign investment in the automobile sector and has allowed 100% foreign direct investment (“FDI”) under the automatic route. Focus is now shifting to electric vehicles to reduce emissions. With the above availability of facts, EVs are not a threat to Ethanol and there is a HUGE demand for ethanol for the next many years. Both Electric Vehicles and Ethanol Vehicles would play a vital role in the growth of the auto industry simultaneously.

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