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The U.S. Flexfuel Cars market size was valued at US$ 4.47 billion in 2023 and is expected to reach US$ 6.95 billion by 2030, grow at a compound annual growth rate (CAGR) of 6.5% from 2023 to 2030. Flexfuel cars can run on gasoline, ethanol blends up to 85% (E85), or any combination of the two. The ability to use different fuel blends makes flexfuel vehicles attractive as it reduces dependence on gasoline and provides more flexibility. The growth of the U.S. flexfuel cars market is driven by supportive government policies, rising fuel prices, and environmental benefits of using ethanol blends.

The U.S. flexfuel cars Market is segmented by fuel type, vehicle type, technology, and region. By fuel type, the market is segmented into E85, E15, E70, E10 and others. The E85 segment held the largest share of the market in 2022, owing to its high ethanol content and ability to drastically cut down greenhouse gas emissions.

U.S. Flexfuel Cars Market Regional Insights

Northeast Region:

  • The Northeast, which includes states like New York, New Jersey, and Pennsylvania, has a significant market for flexfuel vehicles, especially in urban areas.
  • Government incentives for cleaner and renewable fuels have encouraged the adoption of flexfuel cars.
  • The region's dense population and emphasis on environmental sustainability contribute to the demand for flexfuel options.

Midwest Region:

  • The Midwest, often referred to as the "Corn Belt," is a prominent region for flexfuel vehicles in the United States.
  • States like Illinois, Iowa, and Nebraska are major producers of corn-based ethanol, a key component of flexfuels.
  • Flexfuel cars are popular among consumers and businesses in the Midwest due to the abundant availability of ethanol and government support for the ethanol industry.

South Region:

  • The Southern region, which includes states like Texas, Florida, and Georgia, has a diverse market for flexfuel vehicles.
  • The region's warmer climate and extensive driving distances make fuel efficiency an important consideration for consumers, driving interest in flexfuel options.
  • Government policies and consumer preferences play a role in shaping the flexfuel market in the South.

Western Region:

  • The Western region, encompassing states like California, Oregon, and Washington, is known for its environmentally conscious population.
  • Flexfuel cars, particularly those running on ethanol, align with the region's emphasis on sustainability and reduced greenhouse gas emissions.
  • California, in particular, has been a leader in promoting clean fuels and technologies.

U.S. Flexfuel Cars Market Drivers:

  • Supportive Government Policies and Incentives: The U.S. government has implemented various supportive policies, mandates, and incentives to drive the adoption of renewable fuels like ethanol and expand the flexfuel vehicles market. The Renewable Fuel Standard (RFS) program by the EPA requires a certain volume of renewable fuels to replace the use of fossil fuels in transportation. The program has led to significant growth in ethanol production and use in the U.S. Further, the Bipartisan Infrastructure Law establishes a grant program to expand the availability of higher ethanol blend infrastructure. Such policies encourage automakers to expand their flexfuel offerings and provide a boost to the market.
  • Focus on Reducing Greenhouse Gas Emissions With rising concerns over climate change and greenhouse gas emissions, flexfuel vehicles are gaining prominence as they can drastically reduce lifecycle GHG emissions compared to conventional gasoline-only vehicles. According to Argonne National Laboratory, E85 flex-fuel vehicles can reduce GHG emissions by up to 40% compared to traditional vehicles. The ability to cut emissions has prompted automakers like Ford, GM, and Stellantis to invest in and expand their flexfuel vehicle offerings in line with sustainability targets. This is a key factor spurring market growth.
  • Cost Competitiveness of Ethanol Corn-based ethanol has remained cost competitive with gasoline in recent years, making ethanol blends like E85 an economically viable fuel choice. The production costs of corn ethanol have also declined over the past decade driven by improved production technologies. Moreover, federal tax credits and other incentives reduce the cost of ethanol further. The cost competitiveness of ethanol is likely to accelerate the adoption of flex-fuel vehicles capable of running on higher ethanol blends.
  • Domestic Availability of Ethanol Feedstock: The U.S. has a well-established corn-based ethanol production system capable of supplying significant volumes domestically. According to the U.S. Department of Agriculture, corn used for ethanol production in the U.S. reached over 5 billion bushels in 2021. The wide availability of feedstock within the country provides a stable supply environment for ethanol and supports the expansion of the country’s flexfuel vehicle fleet utilizing ethanol blends.

U.S. Flexfuel Cars Market Opportunities:

  • Growing Adoption of SUVs and Light Trucks Owing to low gasoline prices and changing consumer preferences, light trucks and SUVs are gaining significant share in the U.S. automotive market compared to passenger cars. Major OEMs like Ford, GM, Stellantis, Toyota, and Honda already offer several popular SUV and truck models with flex-fuel capabilities. The rising mix of these vehicle types offers significant room for growth for flex-fuel technology in the U.S. market.
  • Transition to Advanced Biofuels While most flex-fuel vehicles today use corn-based ethanol, growth opportunities exist by expanding the use of advanced biofuels like cellulosic ethanol and biomass-based diesel blends. These advanced biofuels can deliver even lower GHG emissions compared to corn ethanol. Government support and manufacturer initiatives to scale up advanced biofuel production can accelerate their adoption in flex-fuel models.
  • Consumer Education and Incentives A lack of consumer awareness about the benefits of flex-fuel vehicles and availability of E85 fueling infrastructure has constrained wider adoption. Automakers and government agencies have an opportunity to stimulate demand by educating consumers, providing incentives for flex-fuel vehicle purchases, and invest in expanding E85 station networks. Such efforts can significantly expand the country’s flex-fuel vehicle fleet.
  • Flexfuel Technology for Hybrids and Electrics Automakers can potentially integrate flex-fuel technology into their hybrid and electric vehicle offerings to further maximize environmental benefits and energy efficiency. The ability to use ethanol along with gasoline and electricity can enable manufacturers to enhance the GHG reduction potential of their vehicle lineup.

U.S. Flexfuel Cars Market Report Coverage

Report Coverage Details
Base Year: 2022 Market Size in 2023: US$ 4.47 Bn
Historical Data for: 2018 to 2021 Forecast Period: 2023 - 2030
Forecast Period 2023 to 2030 CAGR: 6.5% 2030 Value Projection: US$ 6.95 Bn
Geographies covered:
  • U.S.: Northeast Region, Midwest Region, South Region, Western Region
Segments covered:
  • By Fuel Type: E85, E15, E70, E10, Others
  • By Vehicle Type: Passenger Cars, Light Commercial Vehicles, Heavy Commercial Vehicles, Others
  • By Technology: Flex Fuel Injection System, Flex Fuel Heating System, Others
  • By Sales Channel: OEM, Aftermarket
Companies covered:

Renault SA, PSA Group, Tata Motors, Changan Automobile, BAIC Motor Corporation, Toyota Motor Corporation, Honda Motor Co., Nissan Motor Co., Volkswagen AG, BMW Group, Daimler AG, Hyundai Motor Company, Fiat Chrysler Automobiles, Mitsubishi Motors, Ford Motor Company, General Motors, Mazda Motor Corporation, Subaru Corporation, Isuzu Motors Ltd, Suzuki Motor Corporation

Growth Drivers:
  • Supportive government policies and incentives
  • Focus on reducing greenhouse gas emissions
  • Cost competitiveness of ethanol
  • Domestic availability of ethanol feedstock
Restraints & Challenges:
  • Mileage and performance challenges
  • Higher vehicle cost
  • Gasoline price fluctuations

 U.S. Flexfuel Cars Market Trends:

  • Expanding E85 Infrastructure There has been growing momentum in recent years to expand E85 fueling infrastructure to serve the rising flex-fuel vehicle population. As of 2022, there were over 2,700 E85 stations across the U.S., led by major ethanol-producing states like Iowa, Illinois, Minnesota, and Nebraska. Government and industry partnerships are underway to install more E85 pumps and make higher ethanol blends more accessible for flexfuel vehicle owners.
  • Use of Bio-Based Ethanol The ethanol used in flexfuel vehicles today is primarily made from corn. However, there is a shift towards adopting bio-based ethanol produced from agricultural and forestry waste and residues. Several pilot projects and commercial plants are coming online across the Midwest U.S. to produce cellulosic ethanol from biomass feedstock. The adoption of bio-based ethanol can further reduce the carbon intensity of flexfuel vehicles.
  • Co-Evolving With Hybrid/Electric Vehicles Major automakers are aggressively transitioning to electric mobility. However, flex-fuel technology is expected to co-evolve rather than get replaced by electrification, given its emission reduction and energy security benefits. Manufacturers are increasingly taking a portfolio approach by having both plug-in hybrids/EVs and flex-fuel models across vehicle segments to meet sustainability goals.
  • Flexfuel Offerings Expanding Globally: While Brazil and the U.S. lead flexfuel vehicle adoption today, markets like Canada, Thailand, Australia, India, and Europe are also witnessing growth. Automakers are launching flex-fuel models across pickup trucks, SUVs, and passenger cars in these emerging markets. The global expansion provides economies of scale for further development and adoption of flex-fuel technology.

U.S. Flexfuel Cars Market Restraints:

  • Mileage and Performance Challenges Compared to gasoline, ethanol blends like E85 have lower energy density leading to reduced fuel economy and mileage. E85 consumption can be 25-30% more than gasoline per mile in flexfuel vehicle models. The performance and acceleration of engines operating on ethanol blends also tend to be lower than gasoline-only operation. These factors pose a challenge for wider consumer acceptance.
  • Higher Vehicle Cost The components and modifications required to make flex-fuel capability standard in vehicle models involve additional costs for automakers. Automakers tend to pass on some of these costs to consumers in the form of higher sticker prices for flex-fuel vehicles compared to their gasoline-only equivalents. The slightly higher upfront vehicle cost can deter wider adoption among price-sensitive buyers.
  • Gasoline Price Fluctuations Historically lower gasoline prices in the U.S. market reduce the incentive for consumers to opt for flex-fuel models or use higher ethanol blends like E85. When gasoline is cheaper, the fuel cost savings potential of ethanol blends diminishes. Sustained lower gasoline prices over the past decade have been a restraining factor on the growth of the U.S. flex-fuel vehicle market.

Recent Developments

New product launches

  • In January 2021, Ford launched its 2021 F-150 pickup truck series with a flex-fuel capability allowing it to run on gasoline and ethanol blends up to E85. This helped expand Ford's flex-fuel offerings in the popular F-150 lineup.
  • In November 2022, Toyota launched the Corolla Cross SUV with a flex-fuel engine in Brazil, marking the first flex-fuel variant of the model. It is expected to attract customers looking for ethanol-powered vehicles.
  • In September 2022, Volkswagen launched the Polo and Virtus sedan models with flex-fuel engines in Brazil. The launch aligns with Volkswagen's aim to have over 70% of its vehicles in Brazil equipped with flex-fuel engines by 2023.

Acquisition and partnerships

  • In October 2022, GM Brazil and Cosan announced a partnership to install over 100 ethanol hydration units at GM dealerships in Brazil. This will expand access to ethanol fuel for GM's flex-fuel vehicle customers.
  • In August 2021, Ford partnered with the National Corn Growers Association and the Governors’ Biofuels Coalition to add 80 new E85 fuel pumps in U.S. cities. This aims to serve Ford's growing flex-fuel vehicle customer base.
  • In April 2022, Mercedes-Benz acquired a minority stake in Flex Fuel Energy Development to help install flex-fuel pumps across Brazil. This supports Mercedes' plans to expand flex-fuel offerings in Brazil.

Figure 1. U.S. Flexfuel Cars Market Share (%), by Fuel Type, 2023


Top companies in U.S. Flexfuel Cars Market

  • Ford Motor Company
  • General Motors
  • Toyota Motor Corporation
  • Honda Motor Co
  • Nissan Motor Co
  • Volkswagen AG
  • BMW Group
  • Daimler AG
  • Hyundai Motor Company
  • Fiat Chrysler Automobiles
  • Mitsubishi Motors
  • Mazda Motor Corporation
  • Subaru Corporation
  • Isuzu Motors Ltd
  • Suzuki Motor Corporation
  • Renault SA
  • PSA Group
  • Tata Motors
  • Changan Automobile
  • BAIC Motor Corporation

Definition: Flexfuel or flexible fuel vehicles are automobiles with an internal combustion engine that can run on gasoline, ethanol blends up to 85% (E85), or any combination of the two. The ability to use higher ethanol blends along with gasoline provides more flexibility and reduces the dependence on fossil fuels. Flexfuel cars are increasingly being adopted worldwide, especially in the U.S. and Brazil, driven by factors like energy security, emission reduction goals, and oscillating gasoline prices.

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Frequently Asked Questions

Limited E85 infrastructure and low availability of E85 fueling stations, Lower fuel efficiency compared to gasoline-only vehicles, Higher cost of flex-fuel vehicles, Low consumer awareness about E85 and flex-fuel vehicle benefits, Automaker focus on electric vehicles over flex-fuel cars

Supportive government policies and subsidies for ethanol production, Volatility in gasoline prices and rising crude oil prices globally, Growing environmental concerns and focus on lowering emissions, Ethanol's benefits in reducing greenhouse gas emissions, Domestic production and availability of corn for ethanol, Automaker initiatives to expand flex-fuel offerings

The E85 fuel type segment is the leading component segment in the market owing to its high ethanol content and ability to drastically cut down greenhouse gas emissions compared to gasoline.

Ford Motor Company, General Motors, Toyota Motor Corporation, Honda Motor Co., Nissan Motor Co., Volkswagen AG, BMW Group, Daimler AG, Hyundai Motor Company, and Fiat Chrysler Automobiles are the major players operating in the market.

North America will lead the cars market.

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