Navigant Research Blog

India Gears Up for EVs

— January 9, 2018

In 2017, governing officials announced that India plans to sell only electric cars by 2030. The announcement was part of larger climate goals put in place by the country under the Paris Agreement—goals which the country is currently projected to meet despite being the third-largest polluting country on the planet and home to over 1.3 billion people. Some speculation of whether this market shift is possible in the allotted time period has surrounded the announcement, but banning the sale of conventional, gas, and diesel-fueled vehicles has become more popular in recent months, especially across Europe with France and the UK announcing bans by 2040. With some of the world’s most polluted cities, meeting its all-electric sales goal will help India reduce emissions and meet climate goals.

Steps to Promoting EVs

Since India’s announcement of EV-only sales by 2030, several steps to increase adoption have occurred throughout the country:

  • Partnerships will allow for collaboration on EV and mobility technology as follow:

Toyota and Suzuki announced in November 2017 that they will co-deploy EVs for the Indian market beginning 2020.

Mahindra and Renesas have partnered to place Renesas as the technology partner of the Mahindra Racing Formula E team. The technology will be used to produce electric road cars as well.

Ola will partner with Tata Motors to add EVs to Ola’s cab fleet in Delhi.

Uber has inked a collaboration with Mahindra to pilot EVs in Delhi and Hyderabad by March 2018. The two will also collaborate with other stakeholders to set up public charging stations in major cities around India.

Tata Motors announced a partnership with Jayem Auto to launch the Nano EV under the name Jayem Neo.

  • New market entrants will allow for increased adoption rates.

Hyundai Ioniq plug-in hybrid will be released in India in 2018.

Honda’s Indian subsidiary is in the process of adopting an EV strategy that allows for affordable vehicles suitable for Indian roads.

– Suzuki, with its partnership with Toyota discussed above, will produce EVs for the Indian market with technical support from Toyota.

  • Government policy announcements promoting adoption and awareness of EVs are now occurring routinely.

– The government introduced smart chargers for EVs in December, with a plan to install 150 of the charging stations in the next 12 to 18 months.

The Maharashtra government is finalizing purchasing EV incentives for manufacturers and consumers—additionally, the national government is reportedly in talks to release purchasing incentives.

– The national government approved standards for EV charging stations via suggestions from the Committee for Standardization of the Protocol for Charging Infrastructure.

– The national government approved use of digital payments for charging of EVs.

Challenges Remain

The actions put forth to increase adoption and awareness of EVs in the Indian market are encouraging, but challenges remain for such a large market, leading to more doubts that the country will be able to reach its 2030 goal. Since charging infrastructure is crucial to adoption, the country will need to rapidly continue expansion of charging station installation, particularly in densely packed cities. Over 90% of EVs sold in India in 2016 were two-wheel vehicles, meaning OEMs will need to tailor model availability to this more popular market segment in India, in addition to four-wheel EVs. Finally, purchase incentives from differing levels of government could spur adoption by making vehicles more affordable in a country which ranked 150th globally in gross national income per capita in 2015.

 

Consumer Survey Indicates Core Audience Needs Expansion

— December 12, 2017

Automakers are introducing new EV models that will appeal to a broader audience of car buyers. Yet, understanding the demographics of consumers with the greatest potential to buy plug-in EVs (PEVs) remains a formidable industry challenge. Navigant Research conducted a survey to understand consumer preferences and demographics when considering a vehicle purchase. Overall, survey results indicated that electric powered vehicles were the first choice of vehicle for their next purchase for 14% of respondents, while 74% indicated gasoline powered as their first choice. When combined, diesel, hydrogen, natural gas, and propane autogas powered vehicles accounted for 12% of respondent’s first type fuel choice.

First Choice Fuel Type for Next Vehicle Purchase

Source: Navigant Research

The gap between electric and gasoline powered vehicles is large for consumers considering a vehicle purchase, but the number considering an EV jumps to 58% of respondents when their second and third choice of fuel types are considered. So, what can the EV industry do to convince that 58% to prioritize emissions-free driving?

To best distinguish who may purchase a PEV, results of respondents who were favorable toward PEVs (ranked electric as their first fuel type preference) and who owned a PEV were compared to focus on any key differences between the two groups. According to the survey, an average PEV owner is likely to be under 40, live in a single-family home, have a 4-year college degree, and make above $50,000 in yearly income.

Consumers with access to parking at their residence are more likely to purchase PEVs due to the ease of access to charging—having an electrical outlet near the dedicated parking increases this likelihood. Therefore, consumers with garages, largely found in single-family homes, are the most likely to own a PEV. A lack of home charging requires a consumer to rely on public charging infrastructure, which in many areas is still insufficient, and discourages adoption.

Observed Consumer Trends

Overall, the demographics of PEV owners and those interested in purchasing a PEV were similar, but two differences stood out. Younger age groups are more likely to own a PEV and be favorable toward a PEV as their next vehicle purchase. There is also a widening gap in the older 45-64 demographic between those who are favorable toward PEVs and those who own them. The 45- to 64-year-old demographic made up 10% of the PEV ownership population, but 21% of those who were likely to purchase a PEV. This data points to a demographic that has unrealized potential for PEV adoption.

The second trend of significance is the disparity between those living in single-family homes and those in multi-family units, such as apartments, lofts, and townhouses. Lack of access to charging is a major barrier to PEV adoption, and those who do not live in single-family homes are less likely to own or be likely to purchase a PEV, as shown in the chart below. No major differences in housing types stand out between the two groups, suggesting that more charging options are necessary to entice multi-family dwellings to buy electric.

EV Consumer Survey: Housing Type

Source: Navigant Research

The Road Ahead

While the consumer survey shows many with positive attitudes toward PEVs, market challenges need to continue to be addressed to make an all-electric transportation future possible. The announcement of longer-range and lower priced battery EV models, charging infrastructure investments, and purchasing incentives indicate that PEVs are here to stay. Market stakeholders should take advantage of this upward momentum to target a wider audience of individuals purchasing vehicles, and promote PEVs to those outside of the current core target demographic.

For more information, see the recent Navigant Research report, Market Data: Electric Vehicle Charging Equipment.

 

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