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Indian consumers embrace EVs in pursuit of sustainability
EV market penetration is projected to grow 10% to 15% by 2030.
Tier-one Indian car consumers pose 70% willingness to consider an electric vehicle (EV) for their next car, higher than the 52% global average. When it comes to two-wheelers, 86% of consumers consider an EV as one of their choices compared to 69% who would consider an internal-combustion engine (ICE) vehicle.
A study by McKinsey amongst Indians across income levels and regions revealed that this decision is hugely affected by sustainability of EVs. Majority or 67% of potential purchasers pay premium to EVs’ positive impact on the environment for its ability to reduce emissions, while 26% chooses them for lower total cost of ownership, and another 26% for reduced engine noise.
As a result, McKinsey Electrification Model as of July 2023 projects EV market penetration to grow 10% to 15% by 2030.
This growth is also seen to be driven by several factors ranging from shift in global climate policies to access regulations for ICEs in several cities across India. These are all efforts to curb air pollution and improve traffic conditions in the area.
The shift to EVs have also been fueled by central and state governments after they introduced the Faster Adoption and Manufacturing of Electric Vehicles, also known as the FAME scheme.
On manufacturers’ end, incumbents have set their eyes on ambitious product-portfolio electrification, while newcomers entered the market with models specifically designed to cater to India’s urban landscape.
Other than the shift to electric cars, India has also seen an increase in consumers considering sustainability in making their decisions. This is seen with 27% engaging and choosing to be more loyal to sustainable brands, 23% advocating for sustainable products and services, and 20% opting for sustainable products and services.
And with 75% of Indians having already changes or staring to change their behavior to consider sustainability, transition to electric cars is evident for India.
