New Delhi: Higher fuel prices, a possible increase in ethanol blending, and improving battery ranges are likely to accelerate the shift towards electric vehicles (EVs) in India, Hardeep Singh Brar, the President and Chief Executive Officer of BMW Group India said on Wednesday, Business Standard reported.
The remarks come amid escalating tensions in West Asia. Israel and the United States carried out military strikes on Iran on February 28, triggering a conflict that led to Iran largely shutting the Strait of Hormuz and pushing up global crude oil prices. Both sides have since agreed to a two-week ceasefire starting Wednesday.
At the same time, India has begun discussions with automakers on moving from E20 petrol, which contains 20 per cent ethanol, to E25, a higher blend. Since ethanol releases less energy per litre than petrol, it can reduce vehicle mileage, raising concerns among buyers and manufacturers.
He said the immediate impact of the conflict is being felt more through currency fluctuations than rising input costs. For the company, which depends on imported components and completely knocked down (CKD) kits, exchange rate movements are a key concern. He noted that it is too early to assess the impact on raw material prices, but added that foreign exchange trends remain the bigger worry. The company has already raised prices by 1-2 per cent from April 1 due to exchange rate changes.
On fuel prices, he pointed out that domestic retail rates have not yet been revised despite the sharp rise in global crude prices. However, any increase at a later stage could influence consumer behaviour. He said that rising fuel costs often prompt buyers to rethink their choices, and the possibility of further hikes could push more consumers towards EVs.