44 Percent Consumers Prefer An EV, 55 Percent An ICE Vehicle For Their Next Purchase: Castrol Survey
Castrol has launched a new global study: Switching ON the rEVolution: The road to EV readiness for markets, carmakers and consumers.’
The in-depth report reveals that an overwhelming majority (97 percent) of surveyed global automotive executives are confident of meeting government-imposed phase-out dates for internal combustion engine (ICE) vehicles.
The study reports that car manufacturers are focused on overcoming these challenges, with almost two-thirds (66 percent) of global automotive executives stating that the transition to EVs is a top priority for their organisation. This is also reflected in how R&D spends are changing. The study found that in 2015 an average of just 11 percent of R&D spends were focused on EVs, but this has almost doubled to 21 percent today, and automotive executives anticipate it will reach 31 percent by 2025, almost a three-fold increase over 10 years. If hybrid vehicles are also considered, the Castrol survey predicts that by 2025, over 70 percent of their R&D spend will be focused on EVs and hybrids.
Closer home in India, consumers' mindsets are shifting, with 44 percent of all surveyed consumers considering an EV for their next vehicle purchase. 55 percent are still considering an ICE vehicle be it diesel or petrol powered. Amongst consumers in the report who have already made the switch, 100 percent would consider an EV for their next vehicle purchase.
Sharing his thoughts about the EV market in India, Sandeep Sangwan, Managing Director, Castrol India Limited said, “In India, there is a lot of buzz around electric vehicles, but EV car sales currently account for less than 1 percent of total new car sales. Considering that penetration of cars is still low in India and is poised to grow further, we foresee continued demand for ICE vehicles till 2040.”
Key Highlights
> 44 percent of consumers surveyed in India are considering an EV for their next vehicle purchase, 55 percent are still considering an ICE vehicle
> 73 percent of non-EV drivers in India feel ultra-fast charging infrastructure is not prevalent enough
> 67 percent consumers in India are undecided about purchasing an EV due to a perceived higher upfront cost, despite agreeing that the overall cost of EV ownership is lower than a petrol/diesel car
> Indian ICE & hybrid car drivers cited lower air pollution as the key factor for considering EVs, while global automotive executives cited state government-mandated ICE phase-out targets
Factors accelerating the transition to EVs and insights from Indian consumers
> Most survey participants believe that governments have a critical role in the transition to EVs. Government-mandated ICE phase-out targets are cited as the number one factor accelerating the industry’s transition, according to 63 percent of global automotive executives in the study. Net zero targets are also a significant factor, with 57 percent of the automotive executives stating that they are an important driver.
> When it comes to consumers, the study finds that contribution to lower air pollution in urban cities is the most influential factor in persuading current ICE and hybrid drivers to make the switch (cited as important by 92 percent of consumers in India), followed by the fact that EVs emit lower carbon emissions than petrol or diesel-powered vehicles (91 percent) and the notion that EVs have lower running costs (89 percent). Moreover, 74 percent of all consumers in India believe that the overall cost of an EV – when tax, fuel and maintenance costs are considered as well as upfront price – is lower than an equivalent petrol or diesel vehicle.
Roadblocks on the road to widespread EV adoption
According to the research, the biggest barrier slowing the industry’s transition to electric vehicles is the high cost of batteries with 56 percent of global automotive executives citing this as a concern. The next most significant barriers were found to be the availability of charging infrastructure (43 percent) and a lack of tech talent (40 percent).
Battery thermal management is also a concern with many instances of fires reported in electric vehicles. In August 2022, bp announced its plans to invest up to £50 Million (Rs. 500 crores) in Castrol’s Global Technology Centre in the UK to help advance the development of leading fluid technologies and engineering for hybrid and fully battery electric vehicles. This will help bring the industry closer to achieving the key tipping points for mainstream EV adoption.
In India, the biggest concern for consumers is around charging infrastructure. 73 percent of non-EV drivers in India believe that ultra-fast charging is not yet prevalent enough. Moreover, despite the majority agreeing that the overall cost of EV ownership is lower than a petrol or diesel car, many consumers (67 percent) are still undecided due to a perceived higher upfront cost. A lack of choice of EV models on the market was also found to be a deterrent (cited by 72 percent of consumers).
