Frost & Sullivan’s Mobility (Automotive & Transportation) team tracks developments of all facets of the Mobility industry. To know more on EV and Frost & Sullivan’s anlaysis on this segment, please write to Priya George at [email protected].
“EV sales have doubled since 2015. In comparison, hybrid cars took 15 years since launch to reach the 1 million mark”, said Kaushik Madhavan, Director, Mobility (Automotive & Transportation) Practice, Frost & Sullivan. He made these remarks at the recently concluded GIL Council Breakfast session held with a few industry veterans and stalwarts from companies like Ashok Leyland, Lucas TVS Ltd, Mahindra & Mahindra, TAFE, Rane Brake Lining Ltd., Daimler etc. The session discussed the EV ecosystem globally and in India, and the available opportunities in this segment. Some of the key takeaways from the session are mentioned below.
Frost & Sullivan estimates over 21 million xEV will be sold globally by 2025, accounting for approximately 21% of the total passenger vehicle market. The trend is moving toward battery capacities over 60kWh to increase the range of an electric vehicle up to 200 miles on a single charge.
Government subsidies
Although the Government of India is not too keen on subsidies for EV, it should continue focusing on promoting renewable energy initiatives apart from incentivizing setting up of local manufacturing facilities for EV components such as batteries, electric motors and other peripherals. Fiscal and non-fiscal incentives have helped increase EV penetration in many countries around the world like Norway and Netherlands.
EV infrastructure
One of the key enablers for EV is presence of charging stations. Manufacturers, utility companies, charging station manufacturers and OEMs need to work together to increase the number of publicly available charging stations to improve the EV adoption rate in the country.
Customer attitude toward EV
More than incentives, charging infrastructure etc., end-user awareness, attitude and willingness to pay for EV is going to define the future of this segment in the country. Today customer attitude toward all forms of EV is characterized by ignorance and pre-conceived notions and in some cases plain old prejudice. There is a considerable difference between customer understanding about certain technologies and quality of awareness. While about 75% of the customers are aware of Mild Hybrid vehicles majority of the customers are only slightly/somewhat aware of EV.
Perceived usage and willingness to pay – a reality check!
More than 60% customers wanted a minimum 150 km range from EV; this number is even higher when it comes to customers from Tier 2 cities whose average driving distances are longer than Tier 1 customers. The disconnect is pretty stark when it comes to willingness to pay and the perceived use of EV. Almost 40% customers said that they want EV to be priced below the price of the current vehicles they use. Of those customers willing to pay more, only 15% are willing to pay more than 30% of the price of the current vehicle. Infrastructure related challenges are the main reasons for customers wanting to pay lower for an EV than their currently owned vehicles.
Two and three wheelers may just be the key
About 80% of panel members from the GIL Council Breakfast session agreed that electrification of majority of the vehicles would first occur in two and three-wheelers that are used commercially, before trickling into fixed distance operating commercial vehicles and passenger vehicles on a much larger scale. Given the dichotomy between customer expectations, government goals and OEM plans, the solution to India’s Electric Mobility conundrum lies between Internal Combustion Engine vehicles and Fully Electric Vehicles at least to start the electrification journey. In India’s case, a perfect solution (EV) should not become the enemy of the workable solution (Hybrids).
