EVolve 2022: Decoding the Indian EV consumer

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In many ways, brands like Tesla were almost single-handedly responsible for putting EVs on the global map by making them desirable. No longer was the technology limited to golf carts and milk floats. Instead, Tesla proved that lithium-ion battery chemistry could be used to deliver explosive speed, wrapped in top-shelf luxury. Tesla may have done plenty to make the technology aspirational, but the price point it operated in did little to make it accessible. And while global carmakers continue to struggle with the conundrum of the elusive low-cost EV, the challenge of making EVs accessible seems to have fallen upon Indian EV makers, offering a variety of two-wheeled mobility solutions to a populace besieged by crippling fuel prices. Unlike highly industrialised car markets like the US and Europe, India’s EV market has grown from the bottom up. By all accounts, when it comes to Indian consumers, utility trumps novelty. However, when it comes to purchasing decisions, it’s not all number crunching and utilitarian logic, as far as the Indian EV buyer is concerned.

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Srinivas Krishnan, Senior Vice President at Adfactors PR, says that the risk-taking ability of the Indian EV consumer is not to be overlooked. “I think the Indian consumer, yet again, is surprising OEMs, the government, policymakers and all other stakeholders in the mobility space.” According to Krishnan, there have been several missing links in the e-mobility space, despite which consumers were willing to put their faith in relatively unknown technology. “We are still an emotional lot, we perceive risks and rewards differently as compared to many other consumer cohorts in other countries,” says Krishnan, adding that brands which are mindful of this notion, and attempt to understand the Indian EV consumer’s willingness to experiment with promising technology, are the ones that go far. “The most successful companies in India are those that treat the Indian customer with respect and take the effort to understand their behaviour rather than try to unilaterally change it.”

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Of course, that isn’t to say that central and state government-sponsored rebates and incentives haven’t played a role. There’s a direct correlation between EV sales, particularly for e2W and the FAME II incentives and state EV policies that have been introduced in 2021. But it’s not as if the EV space has been entirely moribund in the states that are yet to offer incentives (Karnataka, for example) on par with the most pro-EV states (Gujarat, Maharashtra).

Barriers to entry

Despite the steady growth that the EV segment is experiencing, it still occupies only three percent of the overall market share, with electric two-wheelers occupying the lion’s share of the sliver of the automotive pie. The reasons are manifold and are interconnected in a way that perpetuates the cycle of EV sparseness. “Personally, I am ready to switch to EVs. But there is currently no product in the segment I want,” says Krishnan, a motoring traditionalist who drives a diesel crossover on most days, with a penchant for classic and vintage automobiles. The lack of options in the EV space is one of the many issues keeping potential customers at bay and, as a corollary, has caused many manufacturers to continuously hedge their bets when it comes to introducing EVs. This, in turn, keeps more customers from making the switch.

For starters, no local manufacturer, be it Tata Motors or Maruti Suzuki, has managed to successfully take a crack at the affordable low-cost EV. Something of a chimaera, given that lack of local lithium-ion cell manufacturing and battery costs, make it impossible to sell EVs at an entry-level price point. Then there’s the fact that low-cost hatchbacks come with the sort of footprint which allows for a lower battery cell count and therefore, lower range. It’s no accident that one of the first breakthrough EVs happened to be a large, luxury EV like the Tesla Model S. It allowed its makers a large canvas upon which a large battery could be placed to justify the high costs. The fact that it made the product aspirational was an added benefit.

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The absence of strong public charging infrastructure, especially on highways, has played a major role in keeping EVs out of the driveways of single-car households. Why buy a car that limits mobility? “Mobility is about freedom. It’s about going where you want when you want. And with the advent of cab aggregates, mobility has become a lot more flexible,” says Exponent Energy’s Arun Vinayak, adding that at present, electric mobility in the country does not offer that sort of untethered freedom. According to Sorabjee, however, the reasons for limited adoption aren’t all that complicated and essentially come down to one thing: price. “EVs are too expensive. Range and charging infrastructure aren’t such an issue because people who are ready to buy an EV have sorted out their charging and range requirements before they sign the cheque.”

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Ravin Mirchandani, Chairman of the ADOR Group, a manufacturer of AC and DC power solutions, concurs. “Cheaper will always win in India. And EVs will win when the total cost of ownership is at par with an ICE vehicle.” But he sees the light at the end of the tunnel, which may be ending. “We will see an inflexion point around 2025 in electric car ownership because that’s when Giga factories (for localised battery manufacturing) are scheduled to come online,” he adds. Mirchandani’s claimed inflexion point, however, doesn’t come with a quantifiable number. And the only number that has come out of market research isn’t particularly encouraging, pointing at a highly optimistic 30 percent market share by 2030. In reality, it’s likely to be somewhere between 20-25 percent. If everything goes according to plan.

How brands are approaching the matter

Even though the EV story in India has just begun, consumer focus and concerns appear to have gone through a shift, especially when it comes to electric two-wheelers, a lot of which gained notoriety over the last six months for catching fire, seemingly spontaneously.

Ather Energy, which has developed a reputation for making reliable, robust products, chose to highlight its battery’s resilience as the USP of its latest offering, the Gen 3 450X, instead of range and speed. Sure the range went up with the Gen 3 update, as did battery size, but those weren’t the elements that made it to Ather’s latest ad campaign. The TVC shows the brand’s head of battery development sitting atop an oven containing Ather’s own battery pack while eating ice cream. The word “battery” is then mentioned several times in the 1-minute long advertisement, with no mention of design, range or any of the scooter’s external attributes, signifying that battery safety is now front and centre, the main focus for e2W consumers.

Also read: How EV brands should douse the fire

But concerns around battery safety aren’t something manufacturers can quell alone. “There will always be a reason not to adopt certain technologies,” says Krishnan, advocating that it will take concerted efforts from all stakeholders to accelerate the adoption of zero-emission vehicles. Not doing anything is no longer an option.” Krishnan, a PR pro, sees a silver lining in the clouds of smoke emanating from burning batteries. “EV fires are a crisis that needs to be turned into an opportunity. By bringing awareness and getting the government to pay attention to this issue and regulate it. It’s the only way to separate the wheat from the chaff.”

Vinayak is of a similar view when it comes to the need to differentiate between EV startups. “In India, I think we have three kinds of OEMs. First, you have legacy OEMs who have ventured into EV making, and they understand the need for quality and trust. Then there are startups which are building serious products from the ground up. I think Ather has done a very good job of establishing customer trust. Then you have the traders, who essentially repackage imported components and just wish to make a sale and not design or create anything special. That one portion of the industry doesn’t do justice to what EV segment could be.”

Also read: Young car buyers are conscious about safety and the environment: Tata Motors' Shailesh Chandra

“Brands fixate on performance and range instead of sustainability, probably because the entire cycle isn’t sustainable or eco-friendly yet,” says Bertrand D’Souza. “Manufacturers don’t talk enough about how EVs reduce dependency on fossil fuels or if their vehicles are made from recyclable materials. For early adopters, these are critical matters.”

EV brands have incorporated consumer anxieties into their marketing rhetoric, but according to Sorabjee, they’re yet to highlight the other obvious benefit of owning an EV: They’re much easier to use and own. “EV Brands have focussed on the obvious, so far, which is about how EVs benefit the environment and how cost-effective they are (in the long run). The fact that they are much easier to own and drive than ICE vehicles hasn’t been highlighted enough. EVs really take the stress out of everyday driving,” says Sorabjee.

According to Arun Vinayak, EVs can be marketed around a vast number of aspects from the humdrum to the sensational. “You can tell a story about efficiency via a scooter providing a cost advantage, or a story about how an EV can be faster than a sports car,” he says. Krishnan reaffirms that much of the sensationalising of EVs was done by Tesla alone. “Tesla single-handedly revolutionised the image of EVs.”

D’Souza feels that range will continue to be a core area of focus for brands, regardless of the price of the EV or the segment in which they operate. “The current effort is to make denser batteries with higher range. But this would not be necessary if there was an adequate charging network, which still does not exist, both in India and globally”. He also predicts that range anxieties will be alleviated in the future, but it will take a major infrastructural overhaul. “Studies have shown that what is required is a grid spread 50km apart from each other to ensure seamless mobility.”

Note to readers: The last decade has witnessed significant advances in mobility and transport. New technologies and opportunities have brought a dramatic change to our societies. Planet and people-friendly transportation is more relevant than ever in the history of humankind, with everything from health to climate crises hitting us at warp speed. Storyboard18’s Month In This - EVolve 2022: Building an electric future, is an opportunity to bring to the forefront conversations around charging up marketing and brand building, to exchange and share new ideas, challenges and solutions in the field of clean transportation and mobility. Catch this Storyboard18 special on Moneycontrol, CNBC-TV18 and Forbes India.