A mix of rising fuel prices, a likely increase in ethanol blending, and longer battery ranges is expected to hasten India’s move towards electric vehicles, BMW Group India’s President and Chief Executive Officer Hardeep Singh Brar said on Wednesday, according to a Business Standard report.
His comments come at a time of heightened tensions in West Asia. Military strikes by Israel and the United States on Iran on February 28 had disrupted the region, leading Iran to largely shut the Strait of Hormuz and push up global crude oil prices. The situation has since eased, with both sides agreeing to a two-week ceasefire starting Wednesday.
Alongside these developments, the government has started discussions with automobile companies on raising the ethanol content in petrol from 20 per cent to 25 per cent. Ethanol produces less energy per litre than petrol, which can affect vehicle mileage and has raised concerns among both buyers and manufacturers.
Brar said the immediate impact of the conflict is being felt more through changes in currency values than through higher input costs. For BMW Group India, which relies on imported parts and completely knocked down kits, exchange rate movements remain a key concern. He added that it is still early to judge any impact on raw material costs, but noted that foreign exchange trends are a bigger issue at present. The company has already increased prices by 1 to 2 per cent from April 1 due to these changes.
On fuel prices, he pointed out that retail rates in India have not yet been revised despite the sharp rise in global crude prices. However, any increase in the coming days could influence buying decisions. He said that higher fuel costs often lead consumers to reconsider their options, and further increases could encourage more people to opt for electric vehicles.
