EVs Are All Good And Fine, But Why Not Hybrids And Flex Fuel?

“There must be a better way to make the things we want, a way that doesn’t spoil the sky, or the rain or the land.” That quote by ex-Beatles’ bassist Paul McCartney may be music to the ears of environmentalists, but it can’t be the strategy for the way forward, given the complexity of issues. 

Contextualising the climate issues, while catering to the diversity of India is indeed a tricky task, which is why only EVs can’t be the option.

There is a need for the government to give a push to other categories of vehicles that are capable of less emissions. The other sustainable segments of vehicles are flex fuel and hybrid vehicles. 

Reports said the Heavy Industries Ministry is weighing the demands and is currently consulting with the stakeholders to deliberate on the reduction of GST levied on flexible fuel vehicles. 

Currently, the GST levied on flexible fuel vehicles stands at 28 per cent, which is at par with its petrol, CNG and LGP counterparts. 

Even the GST for hybrid vehicles stands at par with flex fuel, petrol, CNG and LPG vehicles.

It is important to note that the government, in its efforts to increase the adoption of EVs, has set the GST levied on EVs at a discounted rate of 5 per cent. 

While the impact of such a concession on EV sales is still being explored, the reduction of GST on flex fuel could certainly inspire consumers and manufacturers to ramp up innovation and production to broaden the options of vehicles in both categories. 

Flex Fuel or Flexible Fuel Vehicles (FFV) function with an internal combustion engine but are also capable of operating on a blend of gasoline and ethanol up to 85 per cent.  

Although India plans to achieve a blending rate of 20 per cent ethanol in petrol by 2025, the petrol being used for running cars in the country already has 10 per cent ethanol.

Nothing solid has materialised so far from the government’s part, but from a consumer standpoint, flexible fuel vehicles need to be incorporated into the idea of sustainable mobility.

Notably, there is no market for flex-fuel vehicles in India right now. However, the landscape may change once there are more options in flex fuel-powered vehicles. 

Japanese carmaker Maruti Suzuki exhibited its Wagon R flex fuel variant at the 2023 Auto Expo. The vehicle is BS6 Phase-II compliant and can operate a blend of 15 per cent gasoline and 85 per cent ethanol. 

Another Japanese carmaker, Toyota, has been innovating in the flex fuel hybrids segment. In the last two years, the Japanese carmaker unveiled two flex fuel hybrids that can be a game changer as they will have the capacity to operate on flex fuel and battery, making them sustainable and fuel-efficient four-wheeler options.

Both, the Toyota Innova Hycross and Toyota Corolla hybrid are two flex fuel hybrids that were unveiled by the Japanese carmaker that can function on ethanol-petrol blend and battery.

Why Flex-Fuel Vehicle

Flexible Fuel Vehicles are in line with the sustainability goal of the less emission ambition. Though it can’t promise zero emission, it still can aid the fight towards achieving net zero. Flex fuel vehicles have less tailpipe emission as ethanol is a cleaner fuel. 

Moreover, ethanol is cheaper than petrol, making it fuel-efficient, affordable, and, from a consumer standpoint, logical to own an FFV. From a trade perspective, ethanol is free from fluctuations in prices as it is not crude oil.

It is also important to note if FFVs can operate on an ethanol blend of up to 85 per cent, it would make them more viable and sustainable. It would be right to suggest that the government’s push can perhaps inspire carmakers to ramp up research and development in this segment.

Not Only FFVs, Hybrids Too

While the government deliberates the tax reduction for FFVs, it would be sensible to suggest it does the same for hybrids. 

The market for hybrid vehicles is more palatable for consumers than EVs. This is corroborated by data from the Vahaan Dashboard. The total number of four-wheeler petrol hybrids registered in 2023 was 3,24,313, significantly higher than EVs, both in terms of absolute numbers and year-on-year growth.

Notably, the automobile industry was in splits recently over the proposition to reduce tax levied on hybrids. Japanese manufacturers Toyota and Suzuki Motor Corp. were lobbying the government to reduce taxes on hybrids, whereas homegrown Tata Motors and Korean carmaker Hyundai were opposed to such concessions. 

As reported by the Mint, a Tata official described any reduction in taxes for hybrids as having the potential to distort the entire investment profile of all OEMs. He further suggested that this tax rationalisation may dissuade from the main focus of ultimately moving towards zero-emission technologies.

The argument seems to hold reason but it doesn’t outweigh the issue of how the lack of infrastructure and cost of EVs are factors keeping customers from moving toward EVs in the four-wheeler category. 

According to Vahan Dashboard, the total number of registrations of four-wheeler EVs stood at just 73,228 in 2023. This is starkly lower than that of hybrids.

The Indian consumer is highly cost-conscious. Unless EV prices come down to be at par with their ICE counterparts, it is unlikely that a major shift will happen soon. Moreover, charging infrastructure and issues relating to end-of-life battery strategy need to be ironed out before consumers start looking at EVs as a viable decision. 

EVs Are Not All That Green

The government and homegrown carmakers have championed EVs as the most sustainable option of all. However, it is not all black and white. Many suggest that an Electric Vehicle optically seems greener than its counterparts. However, various factors inhibit the EVs from being completely green. 

The end-to-end requirements to own an EV have lapses and rely on resources that lead to environmental deterioration.

“EVs are not the solution and neither do they give an absolute resolution to the problem of carbon emissions. They are just a cog in a wheel that can help us move towards less emission,” P Tharyan, Editor, Motown India, a leading automotive portal, told The Secretariat. “However, there are some lapses as in the face of it, EVs are green but from a purview of beginning to end of life, the new-age vehicles have alarming environmental concerns.”

Tharyan further explained that the batteries made for EVs are dependent on mining to extract raw materials, which in itself deteriorates the environment. Moreover, the disposing of end-of-life batteries remains a concern and could further lead to environmental deterioration in the long haul.

Separately, a recent study by Emission Analytics – a firm that analyses emissions data – argued that EVs, owing to their heavier weight, can release significantly more particulate matter from brakes and tyres than modern petrol-powered vehicles with efficient exhaust filters. 

The study found that the release of particulate matter due to tyre wear is 1,850 times more compared to its ICE counterparts. This adds to the argument of how EVs are not that green after all. Therefore, blindly shifting to EVs without understanding the long-term implications can cause greater chaos. 

“Whenever there is a technology change, every part of the new tech needs to be reviewed and understood before we take the leap of dependence. Therefore, we need to understand if the new tech is better than the old one,” said Tharyan.

Depending completely on EVs has numerous ramifications. From an industry perspective, It could lead to job losses, and OEMs shutting shop as they don’t have the resources and skills to adapt to the tech shift.

“I believe the proven technology and the new technology need to work hand in hand so the shift is more adaptable not only for the consumers but also for the industry. Thus, the need of the hour is hybrids,” Tharyan told the Secretariat.

He explained that the adoption of hybrids can help us walk the path of sustainability, as well as give elbow room to ramp up, evolve and get a better understanding of EV and its implications in the long run. 

Some industry experts believe that hybrids are an easier transition as they cater to all the needs of consumers and don’t make them sacrifice their expectations. Moreover, hybrids also have fewer ramifications from an industry perspective as they won’t lead to a massive job loss and keep the industry intact in terms of production.