One in three consumers in India is eyeing electric vehicles (EVs) for their next purchase, says the ‘Think Mobility’ report by Google and BCG. Women are emerging as key decision-makers in the EV market. While EV-related challenges persist, innovations and localised manufacturing could pave the way for greater adoption, says the report.
The report highlights significant growth potential in India’s automotive market. Chart 1 shows that the vehicular market has the highest potential for growth in developing countries such as India. On the other hand, countries such as the U.S., Switzerland, and Denmark, which already have a high vehicle penetration rate, have limited room for further growth.
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Chart 2 shows that 36% of consumers are considering an EV for their next four-wheeler, while 30% are inclined towards an electric two-wheeler.
When read together, Charts 1 and 2 show that not only is there significant growth potential in India’s automotive market as only a small share of the population (3.3.%) owns cars, but a substantial portion of this growth is likely to be driven by consumers who are increasingly inclined towards EVs.
The study also estimates a 2.7-fold increase in elite households by 2035. This suggests that the affordability of higher-priced EVs is unlikely to deter a substantial share of households.
However, barriers remain. Over half express concerns about the availability of charging infrastructure, while 45% are dissatisfied with the high acquisition costs of EVs. One in three worry about battery life, and one in five feel the current variety of models is insufficient (Chart 3).
To address these challenges, the report suggests several solutions: improving the availability and discoverability of charging infrastructure, offering innovative financing options, scaling up localised manufacturing, extending warranties, ensuring transparency in battery health, and introducing new models — 60% of which are being developed by major Indian-original equipment manufacturers and are new to the market.
Women influence 52% of EV purchase decisions, while they influence only 38% of non-EV purchase decisions in India. The report says that over 41% of Indian customers with two-wheelers prefer vehicles with in-built navigation systems on the dashboard. It also says that 85% of Indian users are open to considering the car model they rented as their next purchase. Notably, Gen Z is 2.7 times more likely to use self-drive rentals compared to the older generations.
One in four consumers who are buying a car for the first time are planning to purchase a pre-owned vehicle. To convert these intentions into actual sales, factors such as digitisation, transparency, and trust are essential. Additionally, one in three consumers seek pre-owned cars to upgrade their lifestyle. High-income, status-driven commuters are drawn towards luxury second-hand cars for their uniqueness, while those who take frequent road trips prefer pre-owned vehicles for their durability (Chart 4).
Sellers are 1.5 times more likely to prefer organised channels when selling their cars. These platforms act as one-stop shops, offering streamlined processes, improved valuations, and hassle-free ownership transfers. However, while purchasing pre-owned vehicles, buyers are less inclined towards organised platforms and prefer local networks of brokers and friends. This hesitation stems from a perceived lack of transparency in organised systems, rigid payment structures, and a lower level of trust compared to familiar in-network sources.
Published – January 28, 2025 08:00 am IST