Mercedes India urges phased shift to higher ethanol blends

Mumbai: As India weighs the next phase of its ethanol blending programme, luxury carmaker Mercedes-Benz has urged policymakers to adopt a gradual transition to higher ethanol blends, saying automakers need adequate lead time to adapt vehicles, while older cars on the road shouldn't be overlooked.

Santosh Iyer, managing director and chief executive at Mercedes-Benz India, told ET that while the company's newer models are already compliant with E20 petrol, and some, including the new S-Class Hybrid, are compatible with E25, any move towards higher ethanol blends should be backed by a clear roadmap.

"Give us time, allow us to change what is required up to a reasonable extent," Iyer said, adding petrol pumps should ideally offer multiple fuel grades during the transition, giving owners of older vehicles the option to choose the appropriate one. He said the challenge lies less with newer vehicles and more with India's large in-use vehicle parc, much of which was not originally designed for higher ethanol blends.

The comments from India's top luxury carmaker come as the government starts testing E25 petrol on vehicles as part of efforts to boost ethanol use and cut oil imports, ET reported July 1. However, the rollout isn't expected immediately. Automotive research body ARAI will hold 150,000-km trials before its report is vetted by ICAT. Mercedes-Benz reported record first-half sales of 9,768 vehicles in the first half of 2026, up 9% from a year earlier.

Iyer said the company hasn't faced any significant technical issues linked to E20 petrol and doesn't see the current blend posing a challenge for its cars. While dealers have received more customer queries amid the ongoing debate, concerns typically ease once buyers are informed that Mercedes-Benz models are E20 compliant. He said inconsistent fuel quality may be contributing to the anxiety. Another senior auto industry executive said India's transition to E20 has been much faster than in most other global markets. "There is a limit to how much the industry can adapt while continuing to meet customer expectations," the executive said. "A calibrated approach is essential."

India had originally targeted nationwide E20 adoption by 2030 but advanced the deadline to 2025, completing the rollout ahead of schedule and making E20 the standard petrol available across the country.

The executive also said the government should rather focus on strengthening EV charging infrastructure. "I think we would be better off fixing the charging infrastructure where customer confidence remains the biggest constraint," he said. "EV adoption would have been significantly higher if charging infrastructure had kept pace. We need to balance investments across both technologies rather than pushing one ahead of the other."

BMW echoed the industry's readiness. "Our cars have been prepared to take up to E25 fuel and will be ready in line with future regulations," said Hardeep Singh Brar, president and CEO, BMW Group India.