The Electric Shift: What’s Powering Your Next Car Purchase?

The Electric Shift: What’s Powering Your Next Car Purchase?

In a world where fuel prices fluctuate like the stock market and environmental concerns are rising with more and more consumers asking themselves: Is my next car going to be electric? Once a niche option for the eco-conscious, electric vehicles (EVs) have now zoomed into the mainstream. But what’s really driving this change? Is it the promise of zero emissions, the sleek tech, or perhaps the long-term savings on fuel?

This research was initiated to understand the attitude of the Indian consumer towards EVs – whether they are thinking about purchasing EVs, their motivation and their concerns – guided and mentored by Prof. Sujata Madan, Professor of Practice in Management at McGill University. The study employed a mixed-methods approach, combining both quantitative and qualitative data collection and analysis methods. The sample was drawn from tier 1 and tier 2 cities (as per the RBI definition).

The sample predominantly consists of middle-aged to older adults (amounting to 69%), with a slight female majority (55%). The high education levels and significant proportion of high-income households suggest that the target market for EVs in urban India is primarily affluent and well-educated. The high percentage of internal combustion engine (ICE) vehicle ownership (83.3%) indicates a significant potential market for EV conversion. The equal proportion of hybrid and electric vehicle owners (6.5% each) suggests that alternative fuel vehicles are gaining traction, albeit slowly.

Despite growing environmental concerns, a significant portion of survey respondents exhibited a preference for ICE vehicles over EVs, citing several concerns that hinder their adoption of EV technology. The survey findings reveal that concerns about battery life and maintenance costs are significant deterrents to EV adoption, with respondents expressing worries about the reliability and durability of EV batteries. Furthermore, the lack of a comprehensive and accessible charging infrastructure is a major concern, with respondents citing the need for more public charging stations and faster charging options. The higher upfront cost of EVs compared to ICE vehicles is also a significant barrier to EV adoption, as respondents assert that the current price premium is not justified by the perceived benefits of EVs.Notably, the survey respondents were aware of the positive efforts and initiatives of the Indian center and state governments to promote EV adoption through GST reduction, road tax exemptions, and income tax benefits. Despite these incentives, respondents indicate that these measures are not sufficient to overcome their concerns about EVs. While consumers are increasingly aware of the environmental benefits of EVs, this awareness alone is not driving purchase decisions. Interestingly, a few respondents were concerned about the behavior of the lithium battery in summer temperatures of 51 degrees and some regarded the disposal of the battery as an eco-hazard.

Remarkably, online reviews, personal recommendations and social media – totalling 76% - are the dominant sources of information guiding vehicle purchases. In contrast, manufacturer websites and dealerships play secondary roles, while magazines exert minimal influence. This suggests that consumers are increasingly relying on user experience and personal sources of information rather than company-controlled narratives.

Insights into the factors influencing consumers' future purchase decisions reveal that charging infrastructure and battery-related concerns (warranty and replacement) dominate the considerations of prospective EV buyers. Meanwhile, performance features, such as acceleration and free maintenance, also play significant roles. In contrast, luxury features, larger vehicle options, and advanced driver-assistance systems are less influential, indicating that most consumers prioritize practicality and cost-effectiveness over additional perks. Understanding these priorities is crucial for manufacturers and policymakers aiming to increase EV adoption. 

In conclusion, the survey underscores the importance of a comprehensive strategy to accelerate the adoption of EVs in India. It is evident that tackling key challenges—such as battery longevity, the availability of charging infrastructure, and the affordability —will be crucial in encouraging wider acceptance among consumers. Manufacturers, in collaboration with policymakers, must take a proactive role in addressing these concerns by developing innovative solutions and launching public awareness campaigns. By fostering a deeper understanding of the advantages EVs provide, India can position itself to not only embrace this green technology but also drive significant growth in its EV market.

Ultimately, a multi-faceted approach—one that combines infrastructure development, affordability measures, and consumer education—will be key to transforming India’s transportation landscape. The widespread adoption of electric vehicles (EVs) relies heavily on the development of a robust charging infrastructure. Key strategies include expanding public charging networks, investing in fast-charging technology, and creating public-private partnerships to accelerate infrastructure deployment. Government incentives, such as tax breaks for installing charging stations, are vital, while grid upgrades and standardization across charging networks ensure compatibility and efficiency. Additionally, innovative solutions like wireless charging, battery swapping, and pairing charging stations with renewable energy sources will further enhance the charging experience. Educating the public about these advancements is crucial for driving EV adoption.