Ethanol vs.

EV - The Future Alternative for India's

Automotive Industry
Akash Tiwari1, Janhavi Kolte2, Jayant Bari3, Nikhil Dharwal4,

Rushikesh Brahmankar5, Saagar Desai6

1,2,3,4,5,6 Students, SVKM’s NMIMS University (Navi Mumbai), India

Abstract:

INTRODUCTION

Electric Vehicles in India:

India's rising use of electric vehicles (EVs) is a huge improvement in the global revolution
towards eco-friendly transport. The need for electric vehicles (EVs) is now more important than
ever as climate change remains a major concern around the world and as non-renewable energy
sources are reducing and becoming less important. In India, where there are severe air pollution
problems, energy security issues, and rapid urbanisation processes, the development of electric
vehicles will be very important for economic growth and technological change.

The National Electric Mobility Mission Plan (NEMMP) 2020 and other policies
introduced aimed at promoting the large-scale adoption of electric vehicles and making India a
global hub for manufacturing and innovating in EVs, which also laid foundations for the electric
mobility path of India. Besides, the FAME (Faster Adoption and Manufacturing of Hybrid and
Electric Vehicles) program was another measure to ensure faster adoption as well as
manufacturing for electric vehicles. In addition, various strategic alliances between local
businesses and foreign automobile manufacturers have participated in pushing ahead such
advancements into electric automobiles. Hence, the resulting participation by local entrepreneurs
has inspired further innovations despite using partnerships with foreign companies that allowed
technology transfer, which boosted the development of electric vehicle ecosystems throughout
this country.

The EV market in India is changing rapidly and is now at an important point of

inflection. According to the 2023 Bain India Electric Vehicle Report, EVs represented
approximately 5% of total vehicle sales from October 2022 to September 2023. By 2030, this
share is likely to increase more than 40%, driven by strong growth rates in two-wheeler (2W)
and three-wheeler (3W) categories. 2W EVs are currently dominating the market with 85-90%
market share, while 4W EVs account for just 7-9% and 3Ws just 5-7%. The Faster Adoption and
Manufacturing of Electric Vehicles (FAME) Phase II scheme has contributed significantly
towards these numbers; even so, there are still some hindrances such as high prices compared to
internal combustion engine (ICE) vehicles, range anxiety, limited charging infrastructure and
finance problems.

Though it faces difficulties, by 2030, the electric vehicle market has prospects for more
than 100 billion dollars in revenue For instance, automakers need to find a balance between cost,
range, and performance in order to make them affordable compared with conventional internal
combustion engine vehicles such as Honda Activa which dominates the two wheeler segment.
Also expected are more support from the government; better batteries technology; more local
production reducing reliance on imports and disposal technology of e-waste.

Ethanol Scenario in India:

Another The Indian economy is in high growth with the population rapidly increasing,
additional air pollution problems and high expenditure on oil imports. This has attracted the
government, seeking alternative solutions for decreasing the dependence on fossil fuel sources.
The most workable solution that can be suggested is bio-ethanol which comes with a range of
economic, social, and environmental advantages for new crop demand, increased employment,
and less harmful emission.

The Indian government has reported a reduction of 31.8 million metric tons of
Greenhouse gases emissions during ethanol supply years 2014 to 2022 through interventions
associated with the India Ethanol Blending Program. Despite the progress made in the blending
targets, there are a lot of other issues, particularly about the availability of feedstock and
technological limitations; however, both the policymakers and the producer community are
countering such challenges by bringing better policies and regulations with the backstopping of
technological advancement. (Das, 2023)

At present, the industrial ethanol production capacity of India stands at 13.80BL, out of
which 8.75BL is from molasses and 5.05BL from grain feedstocks. On its way to achieving the
target of 20% blending by 2025, India reached a record blending of 11.6% in Q1 of ESY 2023,
which represents a 13% increase over 2022.

Maharashtra is the leading state in ethanol production, contributing 2.68 BL per annum.
Other major ethanol-producing states are Uttar Pradesh and Karnataka, where ethanol levels go
up to 2.08 and 1.18 BL per annum, respectively. With abundant feedstock, these states are
frontrunners in industrial ethanol production.

The bioethanol industry in India is on its way up the growth curve, offering considerable
potential for innovation and advances in technology. Eventually, new technologies and
innovative practices will fuel a more prosperous dynamic in the bioethanol market. Whether with
second-generation bioethanol gaining weight in the upcoming years or a possible launch of new
generations of yeasts in the Indian market, opportunities are real and have already begun to
bloom. Forecasts of bioethanol demand for use in sustainable jet fuel will not only increase the
production of biofuel, but also help significantly toward the mitigation of greenhouse gas
emissions and better energy efficiency. Against the backdrop of recent progress and a palpable
political will to promote sustainable ethanol production and discourage dependence on fossil
fuels, there is hope for optimism about the future of ethanol in India.

LITERATURE REVIEW

1. Hill et al. (2006) in their study Environmental, economic, and energetic costs and benefits of
biodiesel and ethanol biofuels provides the environmental, economic, and energetic costs and
benefits regarding ethanol and biodiesel biofuels are evaluated in the research paper. The
study by Hill et al. compares the ethanol from corn and the biodiesel from soybeans using
life-cycle accounting. The results indicate ethanol provides a net gain of 25% in energy
whereas biodiesel provides a gain of 93%. Biodiesel requires less agricultural input and also
 has less emission of pollutants compared to ethanol. Both of the biofuels reduce GHG
emissions. However, if all U.S. corn and soybean production were converted to biofuels, it
would only account for a small fraction of the nation's fuel demand, pointing out the physical
limitations that food-based biofuels place on meeting national energy needs sustainably.

2. Bishnoi (2022) in the paper A Study on Electric Vehicles in India: Opportunities and
Challenges Monu Rani Bishnoi has talked about the prospects and problems lying ahead for
the adoption of electric vehicles in India. The study embarks on an investigation into the
prospects of environmental benefits that EVs offer with reduced GHG emissions and lower
reliance on fossil fuels. It talks about various EVs, from BEVs and HEVs to upcoming
technology of fuel cells. Much attention in the research is given to the development of better
battery technology and enhancing the charging infrastructure for EVs in India. This paper
concludes that, though EVs have many advantages, dealing with technological and
infrastructural issues remains the key to their mass adoption.

3. Joshi, Malhotra, and Singh (2022) in the paper Assessing Adoption Intention of Electric
Vehicles in India: The Mediating Role of Government Policies considers factors that may
influence the adoption of electric vehicles in India, with a view to establishing how
government policies are mediated. These key factors were price, environmental concern,
infrastructure requirements, and knowledge about EVs. It established that government
policies actually mediated the relationship between these factors and the intention to adopt
EVs. It therefore calls for strategic government interventions aimed at reducing prices,
improving infrastructure, and raising public awareness. The research informs policymakers
with insights to design effective strategies in boosting the adoption of EVs in India.

4. In the Global EV Outlook 2023 report, The global trend towards sustainable transport is
reflected in increased ethanol and electric vehicle adoption. Countries like Brazil and the US
are largely adopting ethanol-blended fuels. The Proalcool Program of Brazil drastically
reduced GHG emissions and gave a strong push to the ethanol industry as well; in the case of
the US, RFS supported its use and contributed to the benefit of rural economies linked to
corn growers ​(S&P Global)​​(Invest India)​. While EVs have been massive only because of the
leveraging of technological advances in the field of batteries and policy support. Indeed,
according to the International Energy Agency, worldwide electric car sales reached more than
 10 million in 2022 on the back of powerful performances in China, Europe, and the US. The
Indian scenario is different, though, with active pursuit of ethanol blending as a measure
toward cutting down on fossil fuel imports despite the concerns relating to agricultural
inputs. The EV market in India is fast expanding, driven by schemes such as FAME and
massive investments in the manufacturing of batteries and charging infrastructure.

RESEARCH METHODOLOGY

Problem Statement: The car manufacturing sector is facing major challenges of sustainability
and the need for energy security. In this context, we can say that India serves as a unique case
study because it is an emerging economy with a rising middle class. Electric vehicles (EVs) can
come in handy by providing reduced carbon emissions as well as demand for petroleum products
on our roads. But ethanol-based vehicles or E-vehicles are also good options because they can
use local agricultural outputs. The objectives of this research include assessing the value
proposition for different options between EVs and E-vehicles in terms of comparative
advantages, challenges and implications such as; infrastructure, user preferences; economic
viability; environment trends among other factors in India. It sounds like awesome work for the
future generations who are to come up with real solutions.

Objectives:
1. To analyse the current state of EV and E-vehicle adoption in India, including market
penetration, consumer awareness, and government policies.
2. To compare the technical feasibility, environmental impact, and economic viability of EVs
and E-vehicles in the Indian context.
3. To assess the infrastructure requirements for both EV and E-vehicle adoption, including
charging stations and ethanol distribution networks.
4. To evaluate the impact of government policies, subsidies, and tax incentives on the adoption
of EVs and E-vehicles.
5. To examine consumer preferences and attitudes towards EVs and E-vehicles, identifying
key factors influencing purchase decisions.
6. To forecast the future market share of EVs and E-vehicles in India based on various
scenarios and assumptions.
Method of Research:

For this study, we focussed over a comprehensive review of secondary sources to aid our
research. This included academic articles, government reports, industry publications, and online
databases. By synthesising information from these sources, we gained a deeper understanding of
the historical context, policy initiatives, market trends, and technological advancements related
to implementation of EV and Ethanol blended options in India.

Hypothesis:

The evolution of ethanol blending and EVs stand at the forefront of transforming the automotive
agriculture by-produce and energy industries, driven by a confluence of technological,
economic, and regulatory forces. The further narrative dives into the factors promoting and
guiding prospects of both the alternatives by delving into the macroeconomic factors, market
demand, feasibility of infrastructure, pricing policies and adoption pace. These hypothesis will
help us in further evaluating the findings further for recommendations.

1. Economic Factors

Electric Vehicles (EVs): Fuel price hikes have made EVs more appealing among buyers today
when compared to say say about five years due to rise by above 30% percent increase in petrol
price indices over that period within Indian Territory. There has been growing consciousness on
issues pertaining to climate change as well as air pollution which has resulted into demand for
cleaner transport systems especially within towns in India such as those located in Delhi where
PM 2.5 levels are more than ten times above WHO safe limits. Improvements in battery
technology and decreased lithium-ion battery prices have made EVs more affordable and
efficient. In just a decade, lithium-ion battery costs have dropped by around 89 percent from their
previous levels making electric vehicles cheaper than gasoline cars.

Today, as of date, the Government offers subsidies for EV purchases and encourages
growth of charging stations under FAME II scheme (Faster Adoption and Manufacturing of
Hybrid and Electric Vehicles). A sum of Rs. 10,000 crore has been earmarked for this scheme by
the government. Also under PLI (Production Linked Incentive) Scheme, subsidies are being
offered over manufacturing of electric vehicles locally with a view towards establishing India as
a major player in EV production on global scale. The PLI scheme is meant for the automotive
sector only with an amount totaling Rs. 26,058 crore.

Ethanol Blended Fuel: India boasts a solid agricultural sector, generating large quantities of
sugarcane together with other crops that can be converted into ethanol. As at 2020-21, Indian
sugarcane production stood at 30.2 million tonnes. For India, one of the most important strategic
objectives is to decrease its dependence on imported oil. Ethanol, as an indigenous source of
fuel, can help increase energy self-sufficiency and cut the trade imbalance. India imports roughly
85 percent of its crude oil requirement. There is an opportunity for increased earnings for farmers
in rural areas through ethanol production thereby contributing to the growth of the rural
economy. The implementation of the ethanol industry is anticipated to produce 700,000 jobs by
2025.

Government has made it compulsory that ethanol must be mixed with petrol with a view
to increasing blending percentages over time. The goal is to achieve 20 percent ethanol blending
by 2025. Funds by MoRTH have been allocated to establish ethanol production companies and
also encourage farmers to cultivate crops that can be used to make more biofuels. The
government has sanctioned Rs. 4,573 crore for various projects related with production of
ethanol. Investments in R&D are being made to improve ethanol production technologies and to
develop second-generation biofuels from non-food biomass. The Indian government has
allocated Rs. 1,000 crore for biofuel R&D.

2. Market Demand and Projection

Electric Vehicles (EVs): India’s EV market has been on a quite impressive growth trend and
according to estimates, the market is to grow by leaps and bounds from USD 8 billion in 2024 to
USD 120 billion by 2030. This growth is based on the compound annual growth rate (CAGR) of
126 percent of the existing business. 29% for the years 2017-2023, including the CAGR of 22%.
According to your options they could rise to 93% from 2024 to 2030 or 92% from 2024 to 2030.
This ever-rising figure is as a result of the popularity as well as the surge in the use of electric
vehicles in the nation.
 BEVs occupy the lion’s share in the Indian EV market and have a value share of 98
percent at the moment. 38% in 2023. This dominance can be attributed to a number of factors
which include government policies that aim at promoting the usage of EVs, continually
escalating prices of fuel and that the public is gradually getting sensitive to the effects of human
induced global warming and climate change and therefore embracing electric mobility.
Combined, these elements play a big part in the already vigorous market status of BEVs.

When grouped according to vehicle type, the two-wheeler segment seems to be the most
preferred in the Indian EV market at a 17% value share in 2023. These are cheaper to
manufacture and maintain, convenient to manoeuvre within densely traffic areas, have low
operational costs and consumers’ growing preference for electric scooters and bikes. The rising
of this segment proves the paramount importance of the two-wheelers if electric mobility is to be
adopted in India.

The Bain & Co. report estimates that 40-45% of all EVs to be sold in India by 2030 will
be electric two-wheelers, and electric passenger vehicles 15-20%. Consistent with the same, the
Niti Aayog report clearly lays down the government targets of Electric Vehicles achieving 40%
of the Bus segment, 30% of the private car segment, 70% of the CV segment, and 80% of the
two-wheeler segment by 2030. This clearly shows a vigorous and impressive governmental drive
towards the rise of EV in the different categories of vehicles.

For instance, information arising from VAHAN shows an increased trend of market
demand for electric two-wheelers. Especially, the sales in the thirteen-week fourth quarter of Q3
FY 24 were up by 34 percent. A 42% increase as compared to Q2 FY 24 & setting a record by
selling 76,301 vehicles in Q4 FY 24. This growth is not an exception as the Economic Survey of
India 2023 has further revealed the CAGR of domestic EV market at 49% for the fiscal 2022-30.
This means projected 10 million annual EV sales by the year 2030 and approximately 50 million
direct and indirect employment in the next one week employment in the next 7 years.

New trends emerging in India over the Electric Vehicle market show an increasing trend
towards the use of Micro mobility vehicles such as electric two wheelers and three wheelers. The
Ola Bikes and Vida V1 are among the widely known electric scooters that are fueling this
segment’s growth. Moreover, the launching of the FAME India scheme of the Indian government
that offers subsidies and higher demand for electric micro-mobility in the future will provide a
positive outlook to the market in the future years.

Ethanol Blended Fuel: The current size of the Indian ethanol market is about 3200 million litres
in FY2023 thus, it is growing at a CAGR of 5%. Incorporating analysis of the forecast period up
to FY2035, the growth of this type of investment reaches 67% of the total investment. Based on
the use of ethanol in fuel additives and beverages, the market revenue of the Indian Ethanol in
the estimated years will grow rapidly. Additionally, the planned strategic initiatives of the
Government of India sponsored towards the transformation of excess sugar to Ethanol is again
complemented by the prospect of building Ethanol Economy that shall incline demand for
Ethanol in future.

Under National Biofuel Policy 2018 with fixing the Ethanol mixing rate of 10% by 2022
and 20% by 2025 against current rate of 2-3%, demand of Ethanol has grown steep throughout
the period of forecast. Over the last five years, the Indian government has been encouraging the
capacity enhancement of Ethanol with an intention to reduce the dependency on imported crude
oil and also to make use of excess stocks of sugar found in the country for the production of
ethanol.

Source: Roadmap for Ethanol Blending in India: 2020-2025 | NITI Aayog | Ministry of Petroleum and Natural Gas

The Indian government in the last five years has been supporting the increase in the
production capacity of Ethanol not only to import dependence on crude oil but also to involve
excess sugar stocks into Ethanol production. Some of the leading players in the India Ethanol
Market are the Samson Distilleries Private Limited, Shakumbari Sugar and Allied Industries Ltd,
Saraya Distilleries Ltd, Godavari Biorefineries Ltd, Wallams India Agro Products & Power Ltd,
Shree Renuka Sugars Ltd, EID Parry, the Bajaj Hindusthan Ltd, Mawana Sugars Ltd, and
Triveni.

Projecting growth in this segment, expenditure projections for 2019-20 for petrol was at
4,656 crore litres, while for blending percentage at 15%, it needed 698 crore litres of ethanol. A
good increase is expected in 2024-25, the blending target of petrol is 20% and the projected sales
of petrol is 4,939 crore litres, meaning that the requirement of ethanol would be 988 crore litres.
Based on the same 20:80 blending ratio, petrol sale by 2025-26 is expected to be 5,080 crore
litres and for this 1,016 crore litres of ethanol will be required. These projections depict a
progressive rise in the two aspects of sales in petrol and percentage blending for ethanol in
subsequent years.

The gradual increase in the consumption of ethanol is as a result of the global trend that
promotes the use of environmentally friendly commodities in the fuel market. But these may
change over time because of underlying elements such as EV’s market penetration rate. The
figures are encouraging knowing that new vehicles shall be using the E20 fuel from April 2033
and there is likely to be a call for ethanol with the introduction of E100 two-wheelers. This
planned upgradation in ethanol blending with the gasoline is in accord with the overall
environment policy and plans the transportation sector’s effective methods to minimise their
carbon footprints.

3. Current Scenario of Infrastructure

Infrastructure for EVs: There are currently more than 5,234 public EV charging stations across
the country; of these, Karnataka, Maharashtra, and Delhi top the list with 704, 660, and 539,
respectively. For 8 crore electric vehicles by 2030, the country would require at least around 39
lakh semi-public and public EV charging stations. The deficit at this time is huge, with one
station catering to 135 EVs against the global benchmark of one per 6-20 EVs. Challenges come
in the form of an inappropriate power grid, geographical diversity, and the financial constraints
of small businesses and local communities. There are geographical inequalities as states like
Lakshadweep and Sikkim have only one station. There are better infrastructure developments in
urban areas compared to rural areas where it is tough to have such facilities.

There are only about 2,500 battery swapping stations across India, largely for twoand
three-wheelers. The EV battery swapping market, valued at USD 14.2 million in 2023, is
expected to grow at a CAGR of 25.4% until 2030 to hit USD 68.8 million. Maximum stations are
located in Uttar Pradesh, while Karnataka is the fastest-growing state. In this scenario, challenges
would be battery performance deterioration and fewer facilities for fast charging. Increasing
electric rickshaws and government incentive schemes present opportunities.
 Source: EV Infrastructure in India: What to Expect By 2030
(https://bolt.earth/blog/indian-ev-charging-infrastructure-by-2030)

The Indian government is fast-tracking EV adoption by facilitating public charging

infrastructure. Installation of charging stations is being carried out by the Ministry of Power and
BEE along highways and within city limits. The FAME-India scheme sanctioned 2,877 stations
across states and 1,576 along major highways for its alleviation of range anxiety. The EESL
initiative resulted in 810 stations built by the private sector. Further, Rs 800 crore has been
offered to oil companies for EV infrastructure under FAME, and 100% FDI is permitted in the
sector, pushing electric mobility in India.
Infrastructure for Ethanol Blend Fuel: The existing ethanol production capacity is 1,380 crore
liters, of which molasses-based distilleries contribute 875 crore liters and grain-based ones 505
crore liters. There are a total of around 180 ethanol production plants in the country, comprising
both sugarcane-based and grain-based distilleries. Ethanol will be sold through Oil Marketing
Companies, and it will be blended with petrol at various refineries and depots in different parts of
the country. Thus, blending facilities integrated with OMC depots currently achieve 12% ethanol
blending in petrol, with a target to increase to 20% by 2025.

After the announcement of E20 in 2023 by the Prime Minister, India now aims to achieve
blending of 20% ethanol by 2025-26. On offer at 12,000 outlets now is E20, while ethanol 100
from IndianOil is available at 183 sites. Government efforts and long-term tie-ups by OMCs with
131 ethanol plants are likely to increase production capacity by 745 crore litres per annum.
Equally, the private sector is joining in the fight with the roadmap of E10 by April 2022 and
phased E20 rollouts from April 2023, thereby making the blending targets a collaborative effort.

4. Pricing Factor

Electric Vehicles: Supported by conducive government policies and a growing consumer

interest, electric vehicle markets are growing fast. The new EV policy stipulates a minimum
investment of INR 41.5 billion ($500 million) with no cap on investment; it requires that
manufacturing starts within a period of three years. It enunciates further that there should be 25%
domestic value addition by the third year and 50% by the fifth year. A 15% customs duty is
imposed on Completely Knocked Down units with a minimum CIF value of US$35,000 for a
period of five years, subject to the investment in setting up manufacturing facilities within three
years. It has been capped at 40,000 EVs over five years and not more than 8,000 per annum for
investments of US$800 million or above with carry-over of unutilized annual import limits. Bank
guarantees back investment commitments, which are invoked in case of failure to meet the DVA
and minimum investment criteria.

EVs are still expensive in India vis-à-vis traditional vehicles; the lithium-ion battery adds
significantly to their cost. While the price of an EV like Tata Nexon comes for anything between
₹14-17 lakh, a comparable petrol car comes for around ₹8-12 lakh. While most consumers are
deterred by the high upfront cost of EVs, the running cost is a consideration. Again, EV runs at
about ₹1.2-1.5 per km against ₹4-5 per km for petrol vehicles, making the EV more economic in
the long run.

The Government of India has announced a few subsidies and incentives for the common
people and industries to boost their adoption of EVs. This includes, but is not limited to, the
scheme on Faster Adoption and Manufacturing of Hybrid and Electric Vehicles, or FAME II,
which has earmarked ₹10,000 crore for subsidies on EV purchases and creation of charging
infrastructure. Besides, purchasers of EVs pay a lower GST rate, cut from 28 per cent to 5 per
cent, and enjoy income tax deductions on interest on loans taken for EV purchase. These lower
the overall cost of owning an EV, hence easily making them more accessible and more appealing
to consumers. The price elasticity for an EV is relatively high and driven principally by reduced
battery costs, government incentives, and increased consumer awareness. As the battery prices
are constantly falling and with the strong support of the government, demand for EVs is likely to
rise very rapidly.

Ethanol Blended Fuel Vehicles: The Ethanol Blended Petrol (EBP) Programme of India is
conceptualised as a means toward concern for the environment, reducing import dependency, and
support to the agriculture sector through the promotion of ethanol as an alternate fuel. It is in this
background that several steps have since been taken by the government to augment production,
including the introduction of the administered price mechanism, opening up additional routes for
production of ethanol, and very recently, the amendment to the Industries (Development &
Regulation) Act, 1951. These amendments explicitly bring denatured ethanol under the complete
control of the Central Government, decrease GST from 18 percent to 5 percent, and expand raw
material procurements for ethanol manufacture. The policy initiatives include the National Policy
on Biofuels – 2018, and interest subvention schemes have been brought out for enhancement of
ethanol production capacity. The Programme was extended to the entire country, except
Andaman and Nicobar Islands and Lakshadweep, with effect from April 1, 2019. Accordingly,
procurement of ethanol by the Public Sector Undertaking (PSU) Oil Marketing Companies
(OMCs) has increased from 38 crore litres in Ethanol Supply Year 2013-14 to 164.75 crore litres
in Ethanol Supply Year (ESY) 2018-19, thereby achieving an average blend percentage of
5.50%. The target for ESY 2021-22 is to blend 10% ethanol; such proportion shall then be
progressively increased to achieve 20% by ESY 2029-30.
 Ethanol pricing in India is controlled by the government, which pegs its price to make it
viable vis-à-vis petrol. For the 2021-22 season, different prices were announced: ₹62.65 per liter
for ethanol produced from C-heavy molasses and ₹65.61 per liter from B-heavy molasses. The
price of ethanol from sugarcane juice was fixed at ₹69.85 per liter. Such a pricing strategy would
position ethanol as a viable and cost-effective alternative to petrol, prices of which have been
wildly fluctuating due to volatility in the global oil market. Flex-fuel vehicles offer flexibility
with different ethanol blends, but vehicles running on ethanol-blended fuel, like E20, usually
have slightly lower mileage, with an expected reduction by about 7-8% vis-à-vis pure petrol.

Subsidies and several other incentives, such as interest subvention schemes by the Indian
government, strongly back ethanol production and consumption. They balance the price so that
ethanol would have stable demand to be a serious alternative to traditional fossil fuels. The price
elasticity of ethanol, though generally inelastic in an elastic sense due to government mandates
on blending percentages, may be affected by agricultural output-related factors. The overall
policies of the government of India on pricing, together with other incentives, would therefore be
key to promoting ethanol-blended vehicle adoption and competitiveness in the market.

5. Adoption Pace

Electric Vehicles: Electric Vehicles are more accessible in India. Existing carmakers announced
ambitious goals for the electrification of their product portfolios, while new entrants introduced
models tailored for India's urban environments. It is now at par that the total cost of ownership
for EVs—hitherto acting as a barrier to buyers—has reached parity with ICE vehicles.
Consequently, by 2030, the penetration of EVs into the market will be at around 10-15 percent,
thereby opening up incredible opportunities for all concerned stakeholders: OEMs, financial
institutions, grid operators, and others.

Ethanol Blended Fuel: The roadmap to E20 has many intermediate steps and associated
regulatory changes. MoRTH has mandated BS-VI emission norms and notified standards for
adopting E20 fuel, including safety and emission standards. Since the existing vehicles are
designed to run on pure gasoline, current vehicles can run on E10 with compatible rubber and
plastic components; however, the shift to E20 would need material-compatible and engine-tuned
vehicles for E20. SIAM (Society of Indian Automobile Manufacturers) has shown readiness to
align vehicle production with the E10 and E20 roadmap—targeting material-compliant E20
vehicles by April 2023 and E20 engine-tuned vehicles by April 2025. All these compatible
vehicles would come at a price slightly higher than that of regular gasoline vehicles.

6. Challenges in transition for both the alternatives from traditional fuel

Electric Vehicles (EVs) in India: There are a number of challenges to wide adoption in India.
Of course, high upfront costs are one of the primary issues at hand, driven by expensive
batteries. However, with the recent introductions of sub-lakh EVs from Tata and MG, EVs will
become more affordable and send a good message for other OEMs to follow in their footsteps.
Furthermore, low model availability and variety in EVs impact consumer demand, as fewer
choices would be available to buyers of conventional vehicles. Limited consumer awareness and
education on the EV benefits and performance strongly act as a barrier to entry. This requires
aggressive awareness programs to drive acceptance.

Range anxiety is a major concern. Consumers are afraid that they will run out of battery
charge and it would be difficult to find charging stations, more so in case of long-distance travel.
The limited charging infrastructure, particularly in non-metro cities and rural areas, further deters
buyers. High capital expenditure for setting up charging stations slows down infrastructure
expansion. The long charging times, compared to quick refueling of ICE vehicles, also pose a
challenge. Moreover, low domestic capacity to produce batteries and dependence on imports
impinge upon both affordability and performance. A robust battery ecosystem and charging
infrastructure is a requirement.

Another issue is standardization; more particularly, the lack of interoperability across an

extremely wide range of different charging networks keeps many EV users up at night.
Industry-government collaboration has to occur for standard-setting in fast-charging
technologies. The safety concerns associated with the battery technology, such as thermal
runaway and risk of catching fire, have their bearing on customer confidence, too. Domestic
safety standards and regulations have to be robust in order to keep the risk under check. The
policy and regulatory issues, including non-uniform and holistic policy framework and reduction
in subsidies recently, are mired in uncertainty. Clear policies, subsidies, and incentives would be
required to drive EV growth within the country.
Ethanol Blend Fuel: Ethanol-powered vehicles in India face numerous challenges. Reliance on
surplus sugar and grains for ethanol production poses high risks, especially during droughts, and
raises sustainability concerns. Ethanol production from crops like sugarcane and maize requires
more land compared to the solar energy used by EVs, making it less efficient. There are
significant environmental and ethical concerns with using arable land for fuel production instead
of food, as it can lead to malnutrition and food shortages. Economically, ethanol production can
divert crops essential for food security, affecting its cost-effectiveness.

Additionally, ethanol use accelerates engine wear and maintenance issues. Higher ethanol
blends, such as E85, typically reduce fuel economy compared to gasoline. Substantial investment
in distribution and blending infrastructure is necessary, with an annual requirement of over 1,000
crore liters for the E20 program. Technological changes for flex-fuel vehicles increase costs by
INR 25,000 for cars and INR 12,000 for two-wheelers. Limited access to ethanol impacts
reliability and availability. Greater consumer awareness and acceptance of flex-fuel technology
are crucial, and the engineering complexity of enabling vehicles to run on multiple ethanol
blends presents challenges. Effective regulatory and policy frameworks are essential to support
this transition.

FINDINGS & CONCLUSIONS

The research study gives insights into the present and future state of Electric Vehicles and
Ethanol-run vehicles in India. Based on this research, it is estimated that the EV market would
grow significantly with an annual sales projection reaching 27.2 million units by 2032. This is
very much so due to the incentives and subsidies that exist from the government. The Indian
government is looking to achieve 20 percent ethanol blending in fuel by 2025, which would be
supported by regulatory changes and building infrastructure for the same. Technically, though the
range of EVs is pricier up-front, the total cost of ownership works out to be lower since
electricity is cheaper than petrol. They play a very vital role in reducing carbon emissions. While
ethanol vehicles are cheaper at the outset, they pose problems like lower energy density, more
consumption, and increased engine wear. Added to this is the fact that the production of ethanol
is a potential environmental problem due to high water usage.
 The other critical factor in both technologies is infrastructure development. Currently,
there are roughly 1800 EV charging stations in India, which are proposed to be expanded
manifold by various government programs. The principal focus for ethanol would be to increase
production plants and blending facilities in order to achieve the transition to E20 fuel by 2025.
Government policies, particularly the FAME-II scheme and the PLI scheme, act as major drivers
of EV demand by way of substantial financial incentives and subsidies. Regulatory support and
fiscal incentives are being doled out hand in glove for encouraging ethanol production with the
target of reducing oil import dependence.

The other important factor in market dynamics would be consumer preference and
attitude towards EVs and ethanol vehicles. The uptake of EVs itself depends on awareness of the
benefits, model availability, and concerns over the sufficiency of the charging infrastructure.
Ethanol vehicles face slower adoption infrastructural bottlenecks and technical difficulties of
adjustment of the vehicle to higher blends of ethanol. Looking into the future, the EV market of
India may capture a large growth and a substantial market share by 2030. The ethanol-blended
fuels are going to increase; however, its growth will be inhibited by infrastructural and vehicular
adaptation problems in comparison to the EV sector, which has more developed and stronger
support.

RECOMMENDATIONS

1. Given the current infrastructure of 1,800 EV charging stations, India needs to

meaningfully augment this number so that it can accommodate the forecasted 27.2
million EVs in 2032 and make access and convenience available throughout the country.

2. Hybrid vehicles, especially FFV-SHEVs, need to be incentivized in the form of lower

GST rates since they can achieve a requisite intermediate role with lesser 'well-to-wheel'
emissions than purely electric vehicles, fitting into the solution for the Indian situation
driven by coal-based electricity.

3. More advertisements and campaigns should be taken to the general public enlightening
the advantage of EVs and ethanol vehicles in terms of costs, environmental effects, and
available model types.
4. Invest in research and development of battery recycling and ethanol production
technologies as a way of cutting on their impact on the environment while at the same
time looking at various ways that the technologies can be improved to be more efficient
and cheaper.

5. In the view of industry leaders like Nitin Gadkari and R.C. Bhargava, the country must
encourage not merely electric cars but ethanol-run cars, and hybrid cars as well. This
strategy builds from existing technologies and at the same time promotes and sustains
agrarian economies while gradually shifting to cleaner ,renewable energy sources.

6. Promote production of ethanol from agricultural by-products and non-food crops to help
grow rural economies and supplementary incomes for farmers. This pathway may also
reduce food-versus-fuel debate from biofuels.

7. The best practice in regard to integrating ethanol and electric mobility into the
transportation sector could be taken from Brazil, which has more than 30,000 ethanol
fueling stations and a growing EV market.

8. Promote private investment in EV and ethanol vehicle infrastructure through

public-private partnerships while also preserving the private sector’s efficiency and
innovative capacity in quickly developing facilities and technologies.

9. The government should offer balanced incentives to EVs and ethanol-blended vehicles by
way of subsidies for purchasing EVs and investment in infrastructure for ethanol
production, particularly in rural areas, to boost the agrarian economy.

10. Address environment-related concerns about lithium-ion batteries used in EVs through
investment in recycling and sustainable means for disposal. At the same time, ensure that
ethanol is produced in a more sustainable manner by emphasizing water-efficient crops
and processes to ensure minimum environmental impact.

11. Increase production of ethanol from agricultural by-products and other non-food crops to
the full extent possible, including contributing to augmentation of rural economies and
supplementary livelihood options for farmers. This could significantly help dampen the
food-versus-fuel debate connected with biofuels.

12. India can benchmark against Brazil, which has successfully incorporated both ethanol
and electric vehicles into their transportation systems. It has more than 30,000 ethanol
stations and sees a rising EV market.
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