Indian consumers' desire for electric vehicles is growing, here's why?

In the last two years, the Indian EV segment has grown dramatically and in last fiscal quarter alone, EV growth saw a 668 percent increase in two-, three-, and four-wheeled electric vehicles.

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Despite the geopolitical situations and the "permacrisis" effect, factors such as rising fuel prices and climatic conditions have led Indian consumers to prefer EVs (electric vehicles) over conventional IC (internal combustion) vehicles. This gradual increase in interest can also be linked to the policies and promotional measures such as FAME-II, PMP (Phased Manufacturing Programme), and the National Mission on Transformative Mobility and Storage announced by the central government in the previous few years in order to elevate the adoption of EVs.

According to a survey by EY, it is anticipated that 90% of Indian consumers are willing to purchase an EV at a premium. Hence, it proves that consumer behaviour regarding EVs has changed. So the manufacturers are also keen to innovate and bring cost-effective automobile solutions to market in order to cater to the bulging needs of Indian consumers. So what is the reason for this paradigm shift?

Factors leading to growth in the adoption of EVs

In just the last two years, the EV segment has grown dramatically. The last fiscal quarter alone saw a 668 percent increase in two-, three-, and four-wheeled electric vehicles, according to the Federation of Automobile Dealers Associations. Other than significant factors such as expensive crude oil imports, sustainability, and climate change, listed below are some factors driving the growth of EVs.

Increasing vehicle range: This is the major factor that is influencing Indian consumers to consider buying an EV. Due to the advent of technological advancements, the range anxiety with EV’s has vanished. Indian EVs in the 2W segment can travel an average of 100–170 KM on a single charge, increasing the interest of several daily commuters.

Vehicles with futuristic designs and high-tech features: Features such as digital key unlocking, voice control, geofencing alerts, reverse assist, and smartphone-assisted control are attracting Indian customers. OEMs of new-fangled technology are also manufacturing products that reflect the needs of consumers.

Proactive OEMs: Automobile companies are now getting into retailing, servicing, and charging infrastructure. They are going the extra mile to sell directly to customers, providing financing options, free services, and hassle-free component replacement.

TCO reduction: There was previously a general outcry among Indian buyers about EV: it is expensive. Even if the upfront cost of EV looks premium, the total cost of ownership is still low compared to its IC counterparts. The cost of charging is now 70%–80% less than the cost of fuel. Furthermore, because the EV has fewer parts, the maintenance cost is reduced by 30%–40%.

In a TCO comparison between EV and IC vehicles, it turned out that EVs are 50% cheaper to own and maintain over the life of the vehicle than their IC counterparts. According to the Indian government's Vahan Dashboard, 76,657 high-speed E-2W vehicles were sold in October 2022, as compared to 19,264 in October 2021. This proves that Indian consumers are becoming aware of the benefits of electric vehicles, and the market will experience increased adoption.

The advantages of owning an EV

Earth's supply of fossil fuels is limited, and their use is destroying it. Toxic emissions from gasoline and diesel vehicles have long-term negative effects on public health. Electric vehicles (EVs) have zero tailpipe emissions and follow a sustainable approach that is beneficial for the environment, and Indian consumers are aware of this. Furthermore, EVs have lower registration and road taxes than gasoline or diesel vehicles. Here are some other the benefits of EVs for which consumers are changing their buying preferences.

A quiet and easy driving experience: Electric vehicles do not have gears and are extremely easy to drive. Furthermore, they are also quiet, which helps reduce the noise pollution caused by traditional vehicles.

Convenient charging: Today's technological advancements allow EVs to be charged at home for 4-5 hours before embarking on a journey. Furthermore, vehicle owners can use fast chargers or even battery swap services if experience an emergency.

Low running and maintenance costs: Electric vehicles are more efficient, and when combined with the cost of electricity, charging an electric vehicle is less expensive than filling up with petrol or diesel. Electric vehicles require less maintenance than their counterparts. As a result, the annual cost of running an EV is significantly lower.

All things considered

Mobility and transportation have made significant advances in the last decade. Environmentally and socially responsible transportation is more important than ever in human history. Even though the EV story in India is still in its early stages, consumer focus and concerns appear to have shifted, particularly when it comes to electric two-wheelers.

According to NITI Aayog and RMI, EV sales penetration for two- and three-wheelers will reach 80% by 2030 and 50% for four-wheelers, indicating a new avenue for both burgeoning startups and conventional OEMs. The confidence of Indian consumers in new-age mobility is rapidly increasing, and EVs are poised to be the next big thing in mobility as a result of the overall surge in demand.

This article is authored by Nemin Vora, Chief Executive Officer, Odysse Electric Vehicles. All views are personal.