1 in 3 Indians wants to buy an electric vehicle next: Think Mobility Report

1 in 3 Indians wants to buy an electric vehicle next: Think Mobility Report

23-01-2025
  1. In Recent times, India’s automobile market is seeing a big change, with more people interested in electric vehicles (EVs).
  2. According to the Think Mobility report by Google and BCG, 1 in 3 people in India is considering an EV as their next vehicle.
  3. This shows a lot of potential for the EV market, especially since only a small percentage of Indians own cars.

The Rise of Electric Vehicles in India

  1. India has huge growth potential in the automobile market, with only about 3.3% of the population owning cars.
  2. This gives opportunity for a lot of new car buyers.
  3. The Think Mobility report says that 36% of people are considering buying an electric four-wheeler, and 30% are interested in buying an electric two-wheeler.
  4. This shows that people are becoming more interested in EVs, driven by concerns about pollution and the rising cost of fuel.
  5. An important shift is that women are now playing a bigger role in deciding which cars to buy.
  6. They influence 52% of EV purchases, compared to just 38% for non-EVs.
  7. This change in buying behavior is important as women are now key players in shaping the market.

Challenges Facing EV Adoption

While there’s a lot of excitement around EVs, there are still some challenges that need to be addressed before EVs can become mainstream in India:

  1. More than 50% of consumers are worried about the lack of charging stations.
  2. People want to know where they can charge their EVs before making a purchase.
  3. 45% of people are concerned about the high price of EVs. Even though the government is offering some support, the upfront cost is still a barrier for many people.
  4. About one-third of consumers are concerned about how long the battery will last.
  5. There’s also a need for more variety in EV models to suit different tastes and needs.

Solutions to Overcome Challenges

To help people feel more comfortable about buying EVs, the report suggests a few solutions:

  1. There needs to be more charging stations in cities and smaller towns to make it easier for people to use EVs without worrying about running out of charge.
  2. Flexible financing options, such as easy loans or payment plans, could help make EVs more affordable.
  3. Producing EVs and their parts locally in India could help lower prices, making them more affordable for consumers.
  4. Providing clear details about the health of batteries and offering longer warranties could give people confidence that their EVs will last longer.

Changes in Consumer Preferences

  1. More and more people in India are also buying pre-owned vehicles (used cars).
  2. About one in four people buying a car for the first time are choosing pre-owned vehicles.
  3. This is mainly because used cars are more affordable and often give buyers access to better cars without the high price of new ones.
  4. Luxury used cars are also gaining popularity, especially among high-income consumers who want cars that show their status.
  5. Other people who like to travel a lot prefer used cars because they are seen as more durable.

The Role of Digital Platforms

  1. The pre-owned car market is also changing. Many sellers are using organized digital platforms to sell cars because these platforms offer transparent prices, help with valuations, and make the buying and selling process easier.
  2. However, when it comes to buying, many consumers still trust local brokers or friends, as they believe these sources are more familiar and trustworthy.
  3. The report also shows that self-drive rentals are becoming popular, especially among younger people. Gen Z is more likely to rent self-drive cars compared to older generations.
  4. This suggests that younger people prefer flexible and experience-based ways of getting around.

Government Initiatives Supporting EV Adoption in India

  1. FAME India Scheme (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India)

    1. Phase I (2015-2019):
      • Budget: (Rs. 529 crore)
      • Supported : 2.78 lakh EVs, 520 charging stations, and 465 buses.
      • Incentives worth : (Rs. 343 crore).
    2. Phase II (from 2019):
      • Budget: Rs. 10,000 crore
      • Focus on public/shared transportation.
      • Supported 470,000 EVs and 6,315 e-buses.
      • Approved 2,877 charging stations and over 100 EV models.
      • Rs. 1,869 crore allocated for incentives.
  2. Production Linked Incentive (PLI) Scheme for Automotive Sector (2021)

    1. Budget: US$ 3.1 billion (Rs. 25,938 crore).
    2. Aim: Boost domestic manufacturing of advanced automotive technology (AAT) and attract investment.
    3. Expected investment: Over US$ 5.1 billion (Rs. 42,500 crore) in 5 years.
  3. Electric Mobility Promotion Scheme (2024)

    1. Budget: US$ 60.18 million (Rs. 500 crore).
    2. Target: Enhance green mobility, support EV manufacturing.
    3. Supported vehicles: 3.7 lakh EVs (3.3 lakh electric 2-wheelers, 38,828 3-wheelers).
    4. Focus on advanced battery-equipped vehicles.
  4. Battery Swapping Policy (2023)

    1. Purpose: Reduce charging times by swapping drained batteries.
    2. Features: Standardized battery sizes, safety protocols, individual ID codes, recycling/refurbishment, and potential subsidies.
  5. Other Initiatives

    1. Customs Duty Exemption: For machinery/equipment to produce lithium-ion cells for EV batteries (2023-2024 Budget).
    2. Green License Plates: For all commercial and private EVs.
    3. GST Reduction:
      • EVs: Reduced from 12% to 5%.
      • EV Charging Stations: Reduced from 18% to 5%.
    4. Public Charging Stations: 12,146 operational across the country.
    5. Road Tax Waiver: Lower initial cost for EVs.

Looking Ahead

  1. India is expected to see a big increase in elite households by 2035, which means more people will be able to afford EVs.
  2. As their income rises, these households are likely to demand more options and better features in cars.
  3. For example, many people are already looking for cars with inbuilt navigation systems, a feature that is becoming popular among two-wheeler owners.
  4. In conclusion, India’s EV market is growing rapidly, driven by environmental concerns, affordability, and a shift in consumer preferences.
  5. While there are still challenges, such as charging stations and high prices, solutions like better financing, local production, and improved infrastructure can help make EVs a more common choice for consumers.
  6. With more people choosing EVs, India’s roads could become cleaner and more sustainable in the future.

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