Buying Behaviour Of Consumers Towards EVs

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.
 A CASE TO PONDER- Post Covid &Inflation: Changing Mindsets

A Quiet EV Revolution Is Brewing In India’s Hinterland

Everyday at 7 p.m. and Dinesh Gurjar returns home after delivering milk to about 45
houses. He unloads empty containers and puts his scooter on charging in a dimly lit
courtyard.

A petrol-driven Splendor motorcycle, made by India’s biggest two-wheeler company

Hero MotoCorp Ltd., is parked in one corner of the half-covered front that doubles as a
kitchen of his mud-and-bricks home.

The milkman from Umrain village in Rajasthan's Alwar, 164-kilometres southwest of

Delhi, has switched from a motorbike to an electric scooter.

“With petrol prices now at Rs 100 a litre, there were hardly any savings,” Gurjar said,
wiping off sweat as he sat down. He got convinced after his neighbour purchased a
battery-powered two-wheeler a couple of months ago. What struck him was almost no
running cost or maintenance.

His EV, manufactured by Hero Electric Ltd., India’s largest electric two-wheeler maker
(not part of Hero MotoCorp), runs for about 110 kilometres on a single charge. Having
paid Rs 67,000, he expects to recover the cost by next year by saving on petrol.

Gurjar, one of India’s ubiquitous milkmen seen ferrying oversized containers on

motorbikes, is an early convert in a tiny market. But he is part of a quiet electric
revolution brewing in India’s mofussil towns. As petrol and diesel prices hit record highs,
pandemic-scarred Indians are searching for cheaper options. And poor public transport
trumps concerns about lack of charging infrastructure and
Alwar, famous for the Bhangarh Fort and 'kalakand' or milk cake, is a city of four lakh
people. And it represents the electric transition beyond big cities. Four new EV
dealerships opened in the past four months. BloombergQuint’s enquiries revealed two
more are expected shortly.

“It is a misnomer that the urban markets are driving EV adoption. It’s the small towns,”
Naveen Munjal, managing director at Hero Electric, told BloombergQuint over a
WhatsApp call. A large part of the dealer network, he said, is in tier 2 and 3 markets, he
said.

For Hero Electric and peers Okinawa Autotech Pvt., and Okaya Power Group, at least
65% of the sales come from smaller cities and towns, and rural India.
Ashok Gupta, a dealer for Hero Electric in Alwar, said rising fuel prices have changed
the dynamics almost “overnight” as consumers were hesitant about EVs because of low
incentives earlier. “With more electric scooters on the road, the confidence is further
improving,” Gupta said, adding that most of the sales are driven by word of mouth. “If a
customer comes from a nearby village, enquiries from that place go up.”

Can't Spot EVs Here? It's Half The Story.

Units of fossil fuel and electric two-wheelers sold in FY21

15119387
143000
ICE Two-Wheelers
Electric Scooters

comp Pre covid sales July 21 sales bookings

Hero Electric 6000 10000 na
Okinawa 3000 6700 20000
Okaya 0 3000 3000

Electric scooters make up less than 1% of more than 1.5-crore two-wheelers sold in
India every year.
hauliaram Chaudhary booked an electric scooter, like neighbours in his village, some 20
kilometres from Alwar city. “It’s almost impossible to survive with record petrol prices,”
said the daily-wage earner. But he will have to wait for a month because of supply
shortage. About 1,200-km south in Narayangaon, a town in Maharashtra, Vaibhav
Solat, a small dealer of Okinawa scooters, doesn't have enough vehicles to meet the
demand.

There is a waiting period of three to four months for the top-selling models like the
IPraise+ and the Praise Pro,” he said over the phone. Solat has seen demand outpace
supply for the first time in three years. From selling about two or three units a month, he
now has a run rate of 25-30.

The crunch exists across India. Dealers from Uttar Pradesh, Madhya Pradesh, and
Maharashtra that BloombergQuint spoke with corroborated that supply is way short.
Companies, too, have seen demand explode, prompting Hero Electric to stop bookings
in certain cities. Okaya Power Group started making low-speed electric scooters in July
but was stocked out in two months.

Large two-wheeler makers such as Bajaj Auto Ltd., TVS Motor Co., Hero MotoCorp-
backed Ather Energy Pvt. are missing in small towns. Barring Hero Electric, Okinawa,
Ampere Electric Vehicles Pvt. and Okaya, the market is flooded with lesser-known local
brands. One estimate suggests there are 100 electric scooter makers in India.
Even in Alwar, there is little presence of big brands. Gurpreet Singh, a dealer of Sahara
Evols, a multi-brand dealership, started out a month ago. His outlet is right beside a
TVS Motor store, which does not sell its electric iQube yet in the city. Hoping that
anyone who comes for a petrol vehicle will definitely check an electric variant at his
next-door dealership.
Setting up some of these EV outlets is cheaper. Singh spent Rs 12-13 lakh. A
dealership of a decent two-wheeler brand costs Rs 2-3 crore, an owner said who didn't
want to be identified out of business concerns. Even a sub-dealership costs Rs 30 lakh
at least, he said.

Singh sells brands like Cosbike and SuperEco, besides Okinawa and Hero Electric.
Less than 100 metres away, DEV Motors, an unknown U.P.-based electric vehicle
maker, has set up a store of low-speed models.
EVs are the future, and the response is getting better with rising fuel prices,” Singh said.
He expects demand to soar when he gets vehicles with speeds upwards of 40 kmph.

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.

REFERENCES: Bloomberbquint.com

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