Higher fuel prices, ethanol push may accelerate EV shift: BMW India

Rising fuel prices, higher ethanol blending and improving EV ranges could accelerate electric vehicle adoption in India, says BMW Group India chief

Rising fuel prices and the push for higher ethanol blending amid the West Asia conflict, along with improving electric vehicle (EV) ranges, are expected to accelerate the shift towards EVs, BMW Group India President and Chief Executive Officer (CEO) Hardeep Singh Brar said on Wednesday.

 

Israel and the United States carried out military strikes on Iran on February 28, triggering the conflict, after which Iran largely shut the Strait of Hormuz, pushing up global crude oil prices. Both the sides agreed to a two-week ceasefire starting Wednesday.

 

In parallel, India has begun discussions with automakers on moving from mandatory E20 petrol, which contains 20 per cent ethanol blended with petrol, to E25, a higher ethanol mix. Ethanol has lower calorific value than petrol, meaning it releases less energy per litre, which can reduce vehicle mileage. This has raised concerns for both buyers and automakers.

 

 

Brar said the immediate impact of the conflict is being felt more through currency movements than input costs. Forex is more crucial for BMW India as the firm imports components and completely knocked down (CKD) kits. “It’s too early to predict what will happen to raw material prices. For me, the bigger worry is how the forex will play out,” he said, adding that BMW raised prices by 1-2 per cent from April 1 due to exchange rate fluctuations.

 

On fuel prices, he noted that domestic retail rates have not been changed despite the significant rise in global crude prices, but any increase at a later date could influence buying decisions. “Whenever these prices go up, it will trigger a thought in the consumer’s mind -- what if it goes up further -- and that could push them towards EVs,” he said at a media roundtable in New Delhi.

 

He added that policy moves such as higher ethanol blending could further support this shift. “We have not seen any concerns about ethanol blending so far. But any of these moves will definitely bring more customers towards EVs,” he said.

 

Brar also pointed to improving EV technology, particularly driving range -- the distance a vehicle can travel on a single charge -- as a key factor. “Today, we are talking about ranges of over 500 km and even approaching 800 km in luxury EVs. Customers will naturally gravitate towards them,” he said.

 

BMW Group India reported that EVs accounted for 26 per cent of its total car sales in the first quarter of 2026, up from 21 per cent a year earlier, with 1,185 electric vehicles sold during the period. Overall, the company sold 4,567 cars in the quarter, up 17 per cent year-on-year.

 

On policy support for EVs, Brar said state governments must continue incentives such as registration fee waivers to sustain EV adoption. He explained that battery electric vehicles (BEVs), which run entirely on electricity without an internal combustion engine, currently have a price gap of about 15 per cent compared to petrol or diesel vehicles. “If this gap widens to 30 per cent, adoption could fall sharply,” he said.

 

“This is the time to keep the foot on the accelerator. State governments should continue their support so that EV penetration goes up rather than going down,” he added.