Buying Behaviour of Consumers Towards EVs

Suhas Rajkumar Feb 21, 2021

Electric vehicles (EVs) are becoming immensely popular. Undoubtedly, the EVs are going to introduce critical changes in the Indian automobile industry with their massive adoption resulting in more futuristic business models. The global audience is becoming more receptive towards electric vehicles as the world is taking notice of the benefits that these vehicles bring along with them. EVs are recording impressive sales across the globe, and though the US, China and whole of Europe make up for a large chunk of the sales, industry leaders and experts believe that India is emerging as a promising player with a lucrative market.

A deep understanding of consumer needs is quintessential for future mobility developments. A number of factors drive buyer’s purchase decisions such as technological knowledge, features, preferred vehicle range, charging convenience, negligible/zero emissions, tax credits, performance, and other incentives. A study of these will provide an explanation for what motivates buyers to purchase an electric vehicle. EVs operate at a much lower cost fundamentally. And the trends for the last few years show that there has been a steady rise in the interest among Indian masses to opt for electric cars and electric two-wheelers.

Reasons Why EVs Are Becoming Popular

At the outset, electric mobility is widely considered to be an effective way to improve air quality and fulfil environment necessities. EVs ultimately benefit their primary users. Electric vehicles are 97% cleaner and environment-friendly as compared to gasoline powered vehicles. They do not produce any hazardous emissions in the air. When the particulate matter, known as carcinogens, is released into the air by gasoline powered vehicles, it can dangerously aggravate the health conditions of asthmatic patients and cause respiratory problems in others. Thus, EVs eliminate the possibility of such harmful emissions.

In a world where protection of the environment and energy conservation are ever-growing concerns across nations, the development of EVs has become inevitable for fulfilling these needs. In regard to the environment, the EVs provide urban means of transportation that is emission-free. When it comes to energy, electric vehicles are a secure, balanced and comprehensive energy option that is efficient as well as environment-friendly as they use different kinds of renewable energies. Moreover, electric vehicles are expected to have a positive impact on environment, energy, transportation, hi-tech promotion, creation of new industries and economic development.

India, being the world’s third-largest energy consumer after the US and China, is actively working towards building an economy that is progressive, green and sustainable. As part of its mission and commitments under the global climate change accord, India hopes to achieve a renewable energy capacity of 175 gigawatt (GW) by the year 2022. And in this about 100 GW of energy will be derived from solar. The EV industry is starting to uplift itself now and though it constitutes a small percentage of the entire vehicle market, it’s still starting to reach a point where it will have a profound impact globally.

Buyer Behaviour Towards EVs in India

For many, buying a vehicle tends to be a time-consuming process as they take into consideration several internal and external factors which influence their decision. Especially in India, the decision-making process is particularly a complicated and arduous task as the consumers are faced with an influx of information. Market research has shown that when buying an automobile, female buyers give primary importance to features like safety, efficiency, and affordability, whereas male buyers look for performance, aesthetics (interiors and style), and specifications. Also, generally, male buyers are more keenly interested in electric vehicles.

When buyers think of switching to electric vehicles, the viability of this sector is heavily affected by factors like incentives on discarding used vehicles, favorable and effective government policies, and reduction of GST. Buyers also believe that EV manufacturers need to adopt a more proactive marketing approach. Consumers are further interested to know how much would they be saving on their fuel expenses if they switch to EVs. So, if manufacturers can present an estimate of long-term fuel savings, that can really win the buyers’ confidence and influence their purchase decisions in favor of the electric.

The modern generation is driven by sustainability, innovation, and environmental conservation. Electric vehicles tick all the boxes. Most electric vehicle buyers are receptive towards green technology and have been the early adopters of the same, taking pride in becoming an environmental ambassador. Thus, on average, the easy availability indigenously of vehicles, spare parts, and batteries also impacts the consumer mindset to a large extent. On an average, studies have shown, consumers are quite enthusiastic about making the switch to vehicles that would have zero emissions.

Reports suggest that most consumers in India are considering buying an electric vehicle by the year 2022, but many also believe that it would not be until 2025 that the maximum number of new cars which will be purchased then would be electric. The results have shown that for a consumer in India, generally, a charging time of 35 minutes, a range of 401 km from a single-time charge and a price point of Rs 23 lakhs or USD 31,000 are factors that will eventually lead up to mainstream adoption of EVs. However, two-thirds (about 67 percent) of consumers in India have adopted a ‘wait-and-watch’ stance. Studies conducted show that misconceptions about maintenance costs could be possible factors preventing consumers from switching to electric vehicles in a full-fledged manner with about 83 percent of Indians saying that these misleading costs were keeping them from purchasing a full-electric car.

Even though Indian consumers are looking out for a lower price point compared to consumers in other countries, they are nevertheless open to accepting a slightly longer charge time and a range that is slightly shorter. Such market-specific nuances provide in-depth insights into the consumer mindset. Leveraging consumer-willingness to accelerate the ‘EVolution’ is bound to provide a road map for the growth of this industry and help propel the transition so that a greater number of electric vehicles are adopted in India. Overall, the trends paint a positive picture as the majority of consumers look forward to making the switch to electric with Indian buyers wanting to do so earlier than those in markets abroad.

Consumers’ Behaviour Post Covid-19

Consumer behavior is anticipated to undergo massive changes in the post-Covid world. As a precautionary measure, people will avoid the use of public modes of transport, including buses, cabs, metro, and auto. Private cars, biking, and walking have gained preference instead. The prevailing scenario indicates a promising future for the EV industry, especially for the daily city commuters who have to travel shorter distances within the city itself such as homemakers, students, and service industries’ workforce. As it’s a safer and more economical mode, the segment is poised to gain significant traction in the foreseeable future. People will be prioritizing their health a lot more now and will avoid crowded transportation means. Even now, people are depending on electric mobility for fulfilling emergency requirements of food supplies, clothes, and medicines.

Summing It Up

Consumer sentiments and the market, overall, are quite favorable towards electric vehicles. We are presently at a crucial crossroads where an interplay of electric vehicles and decisions of key players will shape the future of transportation either for the better or worse. The period post-pandemic is expected to serve as the perfect chance for various EV brands to successfully connect with their customers, who are fully ready to make the environment-friendly switch.