Flex-fuel Vehicle Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Flex-fuel Vehicle Market is segmented by Ethanol Blend Type (E10 to E25, E25 to E85, and E85 and Above), Vehicle Type (Passenger Cars and Commercial Vehicles), Fuel Type (Diesel and Petrol), and Geography (North America, Europe, Asia-Pacific, Latin America, and Middle-East and Africa). The report offers the market size and forecasts in terms of value (USD billion) for all the above segments.

Market Snapshot

Flex Fuel Vehicle Market Size
Study Period: 2018-2027
Base Year: 2021
Fastest Growing Market: Asia-Pacific
Largest Market: North America
CAGR: >5 %

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Market Overview

The flex-fuel vehicle market is expected to register a CAGR of over 5% during the forecast period, 2022 - 2027. The market was valued at USD 104 billion in 2021, and it is anticipated to reach USD 143 billion by 2027.

The market for flex-fuel vehicles (FFV) has not been impacted by the COVID-19 pandemic as severely as other automotive industries. However, with limited options for an FFV in the market, it did witness a slight decline in sales, considering the restrictions imposed by the respective governments. However, with the situation easing and life returning to normalcy, the FFV market is anticipated to grow during the projected period.

Most of the vehicles running are fueled using conventional fossil fuels, which has led to an increase in toxic exhaust gas emissions. To control vehicular pollution, multiple county governments have put forth several emission restrictions for IC (internal combustion) engine-powered vehicles. These restrictions have opened the scope for research on vehicles running on flex fuels.

In the market, there are various categories and types of FFV from E10 to E85 and above. According to the tests conducted, FFVs running on E85 fuel produce 23% less NOx, 30% less CO, and 4-6% lower CO2. Due to numerous factors, including the reduced tailpipe emissions, domestic production capabilities of ethanol-based fuels, and limiting the use of naturally occurring fossil fuels, the demand for FFVs is expected to increase during the forecast period.

The demand for flex-fuel vehicles is growing significantly in the United States and the Latin American region. It is estimated that more than 84% of the world's ethanol is produced by the United States and Brazil.

Scope of the Report

Flex-fuel vehicles come under the broad category of alternative fuel vehicles. Vehicles running on ethanol, methanol, and gasoline and alcohol (ethanol or methanol) blended fuels are termed flex-fuel vehicles (FFV). The flex-fuel vehicle market covers all the new-age trends and technology developments and is segmented by ethanol blend type (E10 to E25, E25 to E85, E85 and above), vehicle type (passenger cars and commercial vehicles), fuel type (petrol and diesel), and geography (North America, Europe, Asia-Pacific, Latin America, and Rest of the World).

Ethanol Blend Type
E10 to E25
E25 to E85
E85 and Above
Vehicle Type
Passenger Cars
Commercial Vehicles
Fuel Type
North America
United States
Rest of North America
United Kingdom
Rest of Europe
South Korea
Rest of Asia-Pacific
Latin America
Rest of Latin America
Middle-East and Africa
Saudi Arabia
United Arab Emirates
South Africa
Rest of Middle-East and Africa

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Key Market Trends

Ratification of Stringent Exhaust Emission Regulations

The increase in vehicle exhaust emissions from all types of vehicles using fossil fuels has contaminated the atmosphere. The poor air quality has led to an increase in a plethora of serious respiratory diseases. In Europe alone, vehicular pollution contributes to over 30% of total air pollution, including NOx, VOCs, PM2.5, PM10, and others.

To bring exhaust emissions under control, country-specific vehicle authorities have barricaded the production of greenhouse gasses like NOx, SOx, and other harmful pollutants from vehicle tailpipes.

For instance, in Europe, the exhaust emission norms have become even more strict over the years. According to the regulatory authority European Environmental Agency (EEA), in Euro 4 launched in 2005, the NOx standards were affixed at 0.08g/km, whereas in 2009, it got reduced to 0.06g/km, and it has remained the same for light passenger cars since.

Similarly, for CO2 emissions in 2015, standard passenger cars were not allowed to exceed 130g/km of CO2. In 2020, it was revised to 95g/km. The European Commission also targets to reduce this number to 70g/km by 2025.

The reduced amount of greenhouse gases from the exhaust will have a significant impact on health in the long run. Alongside, this will also allow the flex-fuel market to witness an increase in demand in the upcoming years as it is a clean-burning fuel as compared to conventional gasoline or diesel.

Flex Fuel Vehicle Market Share

Asia-Pacific to Witness Significant Growth

More than 70% of the countries in the Asia-Pacific region currently rely upon the import of fossil fuels to run vehicles. The cost of crude oil and its refinement significantly increases the consumer cost of fuel. With emerging markets like India and China, the Asia-Pacific region is expected to witness significant growth.

For instance, in India, to curb the consumption of fossil fuels and tone down the fuel cost, MoRTH (Ministry of Road Transport and Highways) has put forward various deadlines to introduce ethanol-based fuel in the country. Additionally, India accounts for 2% of the global flex-fuel production, which is not enough to fulfill the country’s requirements. Hence, the domestic production of ethanol is targeted to rise from 70 to 150 million liters in the next few years.

The transport ministry is planning to roll out the use of ethanol-based fuel in phases. E10 production is expected to be in motion from April 2022 and E20 from 2025. Various vehicle manufacturers in the country have also been notified to scale up the research to run vehicles on E10 from April 2023 and E20 from April 2025.

As flex fuels can be manufactured domestically using renewable materials like sugar cane, the ethanol-blended fuel will reduce the quantity of raw fuel imported, helping reduce the fuel cost for end users.

With the increase in the availability of ethanol-based flex-fuel, the demand for flex-fuel vehicles may witness significant growth as India is the world’s second-most populated country.

Flex Fuel Vehicle Market Analysis

Competitive Landscape

The flex-fuel vehicle market constitutes various players accounting for a consolidated market. Owing to a wide range of products running on flex fuels and constant developments to find an alternative fuel, the top five players in the market account for more than 60% of the total market share. For instance, General Motors has about 13 vehicle models, Ford Motor Co. has 11 vehicle models, and Stallintis NV has seven vehicle models running on ethanol blend fuel.

The top five players include General Motors, Ford Motor Co., Toyota Motor Corp., Stellantis NV, Honda Motor Co., and Hyundai Motor Co. Other players include Nissan Motor Company, Subaru Corporation, and Volkswagen AG.

Recent Developments

In February 2022, BMW launched a 3-series sedan in Brazil capable of running on ethanol-blended fuel. The new BMW 3 series can function normally even when running entirely on ethanol. A 2.0-liter four-cylinder B48 turbo powers the 3-series that has been slightly tuned to run on ethanol-based fuel.

Table of Contents


    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study




    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Porter's Five Forces Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Consumers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitute Products and Services

      5. 4.3.5 Intensity of Competitive Rivalry


    1. 5.1 Ethanol Blend Type

      1. 5.1.1 E10 to E25

      2. 5.1.2 E25 to E85

      3. 5.1.3 E85 and Above

    2. 5.2 Vehicle Type

      1. 5.2.1 Passenger Cars

      2. 5.2.2 Commercial Vehicles

    3. 5.3 Fuel Type

      1. 5.3.1 Petrol

      2. 5.3.2 Diesel

    4. 5.4 Geography

      1. 5.4.1 North America

        1. United States

        2. Canada

        3. Rest of North America

      2. 5.4.2 Europe

        1. Germany

        2. France

        3. Spain

        4. United Kingdom

        5. Rest of Europe

      3. 5.4.3 Asia-Pacific

        1. China

        2. India

        3. South Korea

        4. Japan

        5. Rest of Asia-Pacific

      4. 5.4.4 Latin America

        1. Brazil

        2. Argentina

        3. Mexico

        4. Rest of Latin America

      5. 5.4.5 Middle-East and Africa

        1. Saudi Arabia

        2. United Arab Emirates

        3. South Africa

        4. Rest of Middle-East and Africa


    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles

      1. 6.2.1 General Motors

      2. 6.2.2 Ford Motor Company

      3. 6.2.3 Toyota Motor Corporation

      4. 6.2.4 Stellantis NV

      5. 6.2.5 Honda Motor Company

      6. 6.2.6 Hyundai Motor Company

      7. 6.2.7 Nissan Motor Company

      8. 6.2.8 Subaru Corporation

      9. 6.2.9 Volkswagen AG

      10. 6.2.10 BMW AG

      11. 6.2.11 Volvo Car Corporation

    3. *List Not Exhaustive

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Frequently Asked Questions

The Flex-fuel Vehicle Market market is studied from 2018 - 2027.

The Flex-fuel Vehicle Market is growing at a CAGR of >5% over the next 5 years.

The Flex-fuel Vehicle Market is valued at 104 Billion USD in 2018.

The Flex-fuel Vehicle Market is valued at 143 Billion USD in 2027.

Asia-Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2021.

General Motors, Ford Motor Company, Toyota Motor Corporation, Honda Motor Company, Stellantis NV are the major companies operating in Flex-fuel Vehicle Market.

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