Electric vehicles have the potential to gain customer attention in India in the context of increasing fuel prices and their desire to go green, according to a new report.
The report 'Gaining traction: Will consumers ride the electric vehicle wave?' by Deloitte Touche Tohmatsu Limited's Global Manufacturing Industry Group is based on a survey conducted across 17 countries including India, China, Japan, Europe and USA covering 13,500 respondents.
The majority of potential consumers are likely to be educated and from urban locations, according to the report. India seems to have almost equal number of male and female potential buyers unlike some of the more developed markets where male buyers tend to be significant, it said.
Interestingly, the early adopters are likely to be from the affluent sections as compared to the middle income groups in the developed economies.
"Electric vehicles (EVs) are no longer just an idea in the minds of car buyers. They are willing to consider the EV as a practical commuting option.
While this is good news for manufacturers of EVs, it must also be recognised that there are a number of barriers that they have to cross before this interest to consider electric vehicles translates into sales for them," Kumar Kandaswami, Manufacturing Industry Leader, Deloitte in India, said.
A third of Indian customers expect to purchase EVs around Rs 4 lakh and another third willing to go up to Rs 7 lakh. This would correspond to the prices they would pay for their conventional Internal Combustion Engine (ICE) cars. Clearly, there is unwillingness to pay a premium for clean technology, as is found to be the case in most markets.
According to the report, the manufacturers have to overcome the challenge of charging time. About half of the customers would expect this to be two hours or less.
The realities that can influence the pace of adoption are the price of fuel and fuel efficiency of the ICE vehicles. A little over 70 per cent of the respondents said they would consider the EV if the fuel prices crossed Rs 85 per litre.
Conversely, 74 per cent of the respondents are less likely to consider buying an EV if the ICE cars were to deliver 32 km per litre of fuel.
"These are important parameters for the manufacturers to consider while looking at the market opportunity for EVs. It is important to note the willingness to trade off one parameter against another would depend on the economics of owning an EV and the capabilities that are offered by the manufacturers evolve," Kandaswami said.
"On the basis of the cost, range and charging time realities of the EVs available in the market, we estimate EVs to be less that 5 per cent of the total passenger vehicles sold in India by 2020. This, of course, can change dramatically if the OEMs are able to achieve technology and price breakthroughs," he said.