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2021

Flex Fuel Engine Market

Flex Fuel Engine Market Size, Share, Competitive Landscape and Trend Analysis Report by Fuel Type (Gasoline and Diesel), Vehicle Type (Passenger Vehicles and Commercial Vehicles), and Blend Type (E10 to E25, E25 to E85, Above E85, and Others): Global Opportunity Analysis and Industry Forecast, 2021-2030

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Author's: Mayank Halmare | Lalit Janardhan Katare
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Flex Fuel Engine Market Statistics 2021-2030:

The global flex fuel engine market was valued at $63.21 billion in 2020, and is projected to reach $105.11 billion by 2030, registering a CAGR of 5.6%. Rest of the world was the highest revenue contributor, accounting for $21.76 billion in 2020, and is estimated to reach $36.84 billion by 2030, with a CAGR of 5.7%.

A flexible-fuel vehicle (FFV) is a vehicle having an internal combustion engine that can run on a combination of fuels, most often gasoline and ethanol. Although a flex-fuel engine can be designed to run on pure ethanol, FFVs in the U.S. are optimized to run on E85, a gasoline-ethanol blend with 51 to 83 percent ethanol, according to the U.S. Department of Energy. The actual composition of E85 varies based on region and season to ensure that the automobile can start in cold weather. Leading automakers such as General Motors, Toyota Motor Corporation, Ford Motor Company, and others have stepped up their efforts to develop flex-fuel engines for passenger and commercial vehicles, offering a significant growth opportunity for the flex-fuel engine market.

Flex-Fuel-Engine-Market-2021-2030

Increased demand for carbon-neutral automobiles around the world to counter rise in global pollution levels propels the flex fuel engine market forward during the forecast period. Flex-fuels have various advantages, including domestic production capabilities and renewability, which might lessen the country's reliance on foreign petroleum. E85 produces fewer greenhouse gas emissions and benzene emissions than gasoline, which encourages the use of flex-fuel engines. For instance, in June 2020, General Motors Company introduced the Chevrolet Silverado HD and GMC Sierra HD, both of which are equipped with Flex Fuel-capable engines that can run on E85 ethanol and gasoline. During the forecast period, such advancements are expected to fuel expansion in the flex-fuel engine market.

The factors such as the stringent environmental regulations and vehicle emission norms, and depleting fossil-fuel reserves are expected to drive the flex-fuel engine market. However, engine damage concerns, scarcity of flex-fuel stations, and development of electric and hybrid electric vehicles are the factors expected to restrict the growth of the market during the forecast period. Moreover, the increase in adoption of sustainable automotive technologies and increased automotive performance on higher ethanol blends across the world in the coming years are the factors anticipated to supplement the flex-fuel engine market’s growth in the coming years. 

The flex fuel engine market is segmented into fuel type, vehicle type, blend type, and region. Based on fuel type, it is divided into gasoline and diesel. On the basis of vehicle type, it is bifurcated into passenger vehicles and commercial vehicles. Based on the blend type, it is segmented into E10 to E25, E25 to E85, above E85, and others. Region-wise it is analyzed across North America, Europe, Asia-Pacific, and the Rest of the world.

Key players, including Cummins Inc., Ford Motor Company, Volkswagen AG, Fiat Chrysler Automobiles, General Motors Company, Honda Motor Co., Ltd., Mitsubishi Motors Corporation, Nissan Motor Co., Ltd., Toyota Motor Corporation, AB Volvo, and others hold major flex fuel engine market share.

Flex Fuel Engine Market
By Fuel Type
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Gasoline is projected as the most lucrative segments

Stringent environmental regulations and vehicle emission norms

Automobiles are major source of ozone, particulate matter, and other smog-forming pollutants. The dangers of air pollution on one's health are enormous. Poor air quality exacerbates respiratory illnesses such as asthma & bronchitis, raises the risk of life-threatening disorders such as cancer, and costs the health-care system a lot of money. Particulate pollution is responsible for up to 30,000 deaths prematurely each year. Mobile sources of pollution are those that move around. Vehicles, engines, and motorized equipment that emit exhaust and evaporative pollutants are illustrations of these sources. Vehicles utilized on roadways for passenger or freight transportation are considered on-road sources. Vehicles, motors, and equipment used for construction, agriculture, recreation, and a variety of other applications are examples of off-road sources. To reduce the environmental impact of the vehicle sector, governments all over the world are passing strict environmental restrictions. For instance, a group of 21 state attorneys general, the District of Columbia, and several large U.S. cities encouraged the US government to implement stringent automobile emissions laws in September 2021. Automobile manufacturers create alternative fuel-powered vehicles that provide a greener driving experience with little or no hazardous emissions. For instance, Porsche announced plans to produce synthetic fuels in February 2021, which is expected to reduce CO2 emissions by automobiles by 85%. Emission regulations are regulatory criteria that govern the emission of air pollutants into the atmosphere. Governments often construct them to meet air quality regulations while protecting human life. Vehicle emissions are regulated differently in different regions and countries. For instance, the European Union had set a target of 147 g/km for light commercial cars by 2020. The adoption of flex-fuel engines is being driven by a growth in awareness of pollution reduction and increased vehicle emission standards. Furthermore, the surge in demand for eco-friendly automotive engines has fuelled the flex-fuel engine market's growth.

Flex Fuel Engine Market
By Vehicle Type
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Passenger Vehicles is projected as the most lucrative segments

Depleting fossil-fuel reserves

According to the International Energy Agency, fossil fuels continue to dominate the global energy system, accounting for 81 percent of primary energy consumption. The volume of conventional oil extracted, which accounts for three-quarters of all liquid oils, has been declining since last decade. The volume of energy per barrel of oil has fallen dramatically in recent years, as have the rates of energy return from oil exploration and extraction, resulting in stagnation in the quantity of energy delivered to the world population for use each year from all liquid oil in recent years. Owing to the rapid rise of the human population, the amount of energy accessible per person has already declined internationally. Since exporting countries' domestic consumption has increased, the volume of oil placed on the world market, which is currently around half of total production has already reduced. Furthermore, as fossil fuel supplies are depleting, the cost of fuels has risen, increasing the country's overall import expenditure by relying on petroleum goods from neighboring countries. This has prompted governments to enact policies aimed at diminish their dependence on imported oil. In addition, due to concerns about fossil fuel depletion, the demand for alternative fuels has grown in the automotive sector. For instance, Maruti Suzuki announced plans to investigate the potential of flex-fuel engines in India in October 2021. Concerns about fossil fuel depletion propel the growth of the flex fuel engine market in the anticipated timeframe.

Flex Fuel Engine Market
By Blend Type
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Above E85 is projected as the most lucrative segments

Engine damage concerns

Since flex-fuel collects dirt easily, it can cause corrosion and engine damage. Various materials, such as some types of plastic, rubber, and metals, can be corroded by ethanol. When a sensitive substance is exposed to ethanol for an extended period of time, it deteriorates. This can cause significant engine damage. Weather and moisture content affect the quality of all gasoline, however ethanol exacerbates the situation. When there is a larger proportion of alcohol in a gas tank, it can grip and hold more water than pure gasoline. If the water concentration rises high enough, the alcohol and water are expected to separate from the gasoline, resulting in a mixture that the automotive engine may not be able to use. It can happen at any point during the transit, storage, or even use process, and it can get worse as time goes on. In summary, ethanol increases the likelihood of the vehicle being damaged when attempting to process and burn contaminated fuel. Ethanol has engine cleaning qualities, so the flex-fuel cleans old deposits from engine components. However, those deposits do not dissolve easily, so they just get carried along until they get stuck, resulting in engine clogging. Furthermore, ethanol has a lower energy content per gallon than gasoline, resulting in a drop in fuel economy while using flex-fuel. According to the U.S. Department of Energy, flex-fuel vehicles typically achieve 20 to 30 percent fewer miles per gallon when using E85. Flex-fuel, often known as E85, is a mixture of gasoline and up to 85% ethanol alcohol. The market for flex-fuel engines is limited by issues regarding engine damage and fuel efficiency.

Increase in adoption of sustainable automotive technologies

With increased concerns about climate change and environmental degradation, automotive companies have made sustainability a strategic goal. Governments, consumers, and investors put pressure on automakers to modify their working practices, culture, and products. This is anticipated to have far-reaching consequences for the sector, which, despite making significant progress, still needs to increase its sustainability efforts. The automotive sector has faced significant pressure from governments and society in recent decades to adopt a more sustainable growth model. Scania, for instance, co-founded collaboration in December 2018 to promote the adoption of bio-gas-fuelled vehicles (which are 90% less polluting and come from waste & leftovers). It plans to develop a network of gas filling stations along Europe's major economic routes. The development of eco-friendly flex-fuel engines are expected to be aided by this increase in the adoption of sustainable vehicle technologies. Automakers have been steadily improving vehicle fuel efficiency, resulting in significant reduction in emissions per vehicle. However, the increased demand for automobiles is diminishing any advances made through traditional approaches. The shift away from sedans and wagons, which continue to have the best fuel economy and lowest CO2 emissions, and toward vehicle types with lower fuel economy and higher CO2 emissions, has offset some of the fleet-wide benefits that would have otherwise been realized from improvements within each vehicle type. Companies are anticipated to migrate to alternative energy sources powered by automobiles, such as flex-fuel driven automobiles, with zero emissions, to minimize overall GHG emissions. The growth in number of government and commercial initiatives to develop and implement cleaner automobile technology has created a potential growth opportunity for the flex-fuel engine market.

Flex Fuel Engine Market
By Region
2030
Rest Of The World 
North America
Europe
Asia-Pacific

Asia Pacific would exhibit the highest CAGR of 6.5% during 2021-2030.

COVID-19 Impact Analysis 

  • The impact of COVID-19 on the flex fuel engine market is unclear and it is expected to remain restricted until the last quarter of 2021. 
  • To prevent the spread of the COVID-19 virus, governments across the globe implemented strict lockdowns and made social distancing mandatory. Consequently, several organizations began work from home programs as a precautionary measure. This led to a sudden fall in global demand for automobiles.
  • Moreover, nationwide lockdowns disrupted the supply chain as several automotive engine manufacturing facilities across the globe were forced to partially or completely shut down their operations.
  • The adverse impacts of the COVID-19 pandemic resulted in massive supply-demand challenges across the globe.

Key Benefits For Stakeholders

  • This study presents the analytical depiction of the flex-fuel engine analysis along with the current trends and future estimations to depict imminent investment pockets.
  • The overall flex fuel engine market opportunity is determined by understanding profitable trends to gain a stronger foothold.
  • The report presents information related to key drivers, restraints, and opportunities ofthe market with a detailed impact analysis.
  • The current market is quantitatively analyzed from 2020 to 2030 to benchmark financial competency.
  • Porter’s five forces analysis illustrates the potency of the buyers and suppliers in the industry.

Flex Fuel Engine Market Report Highlights

Aspects Details
Flex Fuel Engine Market By Fuel Type
By Fuel Type
  • Gasoline
  • Diesel
Flex Fuel Engine Market By Vehicle Type
By Vehicle Type
  • Passenger vehicles
  • Commercial vehicles
Flex Fuel Engine Market By Blend Type
By Blend Type
  • E10 to E25
  • E25 to E85
  • Above E85
  • Others
Flex Fuel Engine Market By Region
By Region
  • North America  (U.S, Canada, Mexico)
  • Europe  (Germany, France, UK, Italy, Rest of Europe)
  • Asia-Pacific  (China, Japan, India, South Korea, Rest of Asia-Pacific)
  • Rest of the World  (Brazil, Argentina, South Africa, Rest of ROW)
Key Market Players
Key Market Players

Honda Motor Co., Ltd., Volkswagen AG, General Motors Company, AB Volvo, Fiat Chrysler Automobiles, Toyota Motor Corporation, Cummins Inc., Nissan Motor Co., Ltd., Ford Motor Company, Mitsubishi Motors Corporation

Analyst Review

The increased adoption of low-cost, eco-friendly automotive technologies around the world, the flex-fuel engine market is predicted to grow significantly.

Automobile makers concentrate their efforts on developing innovative and low-polluting flex-fuel engines that can run on renewable fuels. The flex-fuel engine market is expected to grow at an incredible rate in the future due to the booming e-commerce and logistics industries around the world. Flex-fuel engines are in high demand due to increased automotive production operations around the world. Global automobile production, on the other hand, has decreased in recent years, and the COVID-19 pandemic has pushed back global automotive output till 2020. In the foreseeable future, higher commercial vehicle sales are likely to enhance demand for flex-fuel engines.

Market players have entered into contracts and agreements to secure long-term commercial prospects in response to shifting market conditions. Furthermore, market participants constantly concentrate their efforts on product development to fulfill changing end-user demands and improve vehicle operational efficiency. Emerging nations such as India, Brazil, and Argentina are likely to experience significant considerable expansion in flex-fuel engine production activities due to the abundance of a cost-effective workforce and government attempts to boost industrial activities. Moreover, the market for flex-fuel engines is boosted by the rise in development of eco-friendly automobiles.

In addition, the flex-fuel engine market is segmented into fuel type, vehicle type, blend type, and region. Based on fuel type, it is divided into gasoline and diesel. On the basis of vehicle type, it is divided into passenger vehicles and commercial vehicles. Based on the blend type, it is divided into E10 to E25, E25 to E85, above E85, and others. Region-wise it is analyzed across North America, Europe, Asia-Pacific, and the Rest of the World.

 

 

Author Name(s) : Mayank Halmare | Lalit Janardhan Katare
Frequently Asked Questions?

The global flex fuel engine market was valued at $63,207.2 million in 2020.

Ford Motor Company, Volkswagen AG, General Motors Company, Honda Motor Co., Ltd., and other automotive manufacturers offer flex fuel vehicles across the world.

The report sample for global flex fuel engine report can be obtained on demand from the website.

The global flex fuel engine market is projected to reach $105,111.6 million by 2030, registering a CAGR of 5.6% from 2021 to 2030.

A flexible-fuel vehicle (FFV) is a vehicle having an internal combustion engine that can run on a combination of fuels, most often gasoline and ethanol.

The company profiles of the top players of the flex fuel engine market can be obtained from the company profile section mentioned in the report. This section includes analysis of top ten player’s operating in the industry along with their last three year revenue, segmental revenue, product offerings, key strategies adopted, and geographical revenue generated.

Brazil, U.S., and France are the leading countries that have adopted flex fuel vehicles.

The gasoline segment was the highest contributor to the market, with $52,224.2 million in 2020, and is estimated to reach $88,535.1 million by 2030, at a CAGR of 5.7% during the forecast period.

The rising adoption of alternative fuel energy vehicles and rising gasoline prices are anticipated to fuel the growth of the flex fuel engines in India.

Maruti Suzuki, Hyundai Motor Company, and Toyota Motor Corporation, among other companies are developing flex fuel engines for Indian automotive industry.

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Flex Fuel Engine Market

Global Opportunity Analysis and Industry Forecast, 2021-2030