Tata Motors Passenger Vehicles is preparing to launch its first flex-fuel passenger vehicle by the end of this calendar year or early next year, as India moves to establish a regulatory framework for higher ethanol-blended fuels.

Shailesh Chandra said the recent government notification is intended to create a category definition for flex-fuel vehicles capable of operating on varying levels of ethanol blends.

"As far as we are concerned, we are very comfortable in terms of technology readiness. By the end of this year or early next year, we should be ready with our flex-fuel product also, at least one product," Chandra said during a media call held to discuss the company's Q4 and FY26 performance.

He further added that Tata Motors vehicles have been E20-compliant since 2023. Discussions with the government regarding higher ethanol blends are underway through the Society of Indian Automobile Manufacturers, he said.

Flex-fuel Punch

Tata Motors showcased flex-fuel technology at the Bharat Mobility Global Expo 2025 as part of its broader mobility technology display, which included electric, hydrogen, natural gas and flex-fuel technologies.

The automaker also showcased the Tata Punch flex-fuel model at Auto Expo 2025. It used the same 1.2-litre, three-cylinder naturally aspirated engine as the standard Punch, but with modifications to the ECU, fuel-injection system and exhaust after-treatment system to detect and adapt to different ethanol blends.

The Punch is already available with multiple powertrain options, including petrol, CNG and electric. A flex-fuel version would add another option to Tata Motors' multi-powertrain strategy.

Tata Motors has been expanding its passenger vehicle portfolio across SUVs, electric vehicles, CNG and petrol powertrains. In FY26, the company stated that its powertrain mix stood at 46% petrol, 13% diesel, 14% EV and 27% CNG. Its EV volumes increased by 43% year-on-year, while CNG volumes surpassed the EVs during the year. The company has also expanded its SUV portfolio with products such as the Nexon, Punch, Harrier, Safari, Curvv, Sierra, Harrier.ev and Punch.ev.

Chandra said the company does not intend to alter its long-term product roadmap despite geopolitical uncertainty. "There is no question of changing the long-term product plan. We remain optimistic," he said.

Ethanol push continues

The flex-fuel initiative comes at a time when India is expanding its ethanol blending programme to reduce dependence on imported crude oil and lower emissions.

The government had advanced the target of 20% ethanol blending in petrol to Ethanol Supply Year 2025-26 from 2030. Petroleum Minister Hardeep Singh Puri said ethanol blending had helped save about Rs. 13.6 billion (US$ 141.76 million) in foreign exchange by reducing dependence on imported crude oil. More recently, India proposed amendments to the Central Motor Vehicles Rules to formally include higher ethanol-blended fuels, including E85 and E100. The draft has been opened for public comments before a final decision is taken.

The policy focus has gained importance amid concerns over crude supply and fuel prices linked to geopolitical developments in West Asia. The wars linked to Iran and Ukraine have affected nearly 9% of global oil refining capacity in recent months, contributing to tighter fuel supplies. Brent crude touched US$ 126 a barrel in April, while diesel and jet fuel prices also increased significantly.

Chandra said any rise in petrol or diesel prices could influence powertrain preferences in the Indian market. EVs and CNG vehicles could see increased demand if fuel prices rise sharply, although demand for entry-level vehicles may come under pressure. He added that demand has remained stable so far, with April and May continuing the trend observed after GST 2.0.

Looking ahead, Chandra said the passenger vehicle industry is expected to grow by around 10% in FY27, with Tata Motors aiming to grow faster than the industry through new launches, additional volumes from recent products, EV demand and capacity expansion.