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Q1. Over the last five years, how has the profile of the Indian EV consumer changed and not just demographically but in terms of mindset and expectations?
It is important to remember that five years back, the EV category did not exist in India. So it’s almost like how it has grown from almost zero to where it is today which is well in excess of 100,000 units per year sales.
When we launched Nexon EV in 2020, there was the market and the initial customers are what we call early adopters or very tech-forward people. Gradually, we started attracting a lot of professionals. These customers, while being educated and tech-forward, were aware that an EV is much more comfortable to drive in the city and has a much lower cost of ownership. And, because of their predictable cycles, they could actually plan their charging cycles very easily.
So, the second wave of customers were these kinds of well-educated and internationally aware customers. Fast forward to today, I think EV is well on its way to becoming mainstream. It’s not mainstream yet because at a national level, we are still just around 2 per cent penetration.
But, consumer profiles have changed, and today people who are buying EVs do keep cost of ownership very high in their priority. But they are also the kind of people who are bold, risk-taking– as they are able to see the advantages of an EV over an ICE.
Q2. Are we seeing any substantial change in age groups or income segments and regional adoption or are EVs still more concentrated in early adopters?
The tech-forward early adopters were usually people who are willing to invest a lot of money on a new technology. But, now since it is getting more mainstream, we are seeing a lot of youngsters willing to get into the EV side of mobility, even though it means about 15, 20 per cent higher investment in terms of recent adaptation or the town-class wise adaptation. We generally expect new tech to reach mini saturation level in the bigger cities first, then it cascades down into the smaller towns.
But India’s EV growth has been very different. Today, tier-2 towns sell far more than tier-1 towns in India. Even though the growth of the EV industry in India has not been as fast as we were expecting in 2021 & 2022, when it was really growing multiple times, but now it has stabilised a little bit– the growth rates are not so high.
Now, growth is very homogeneous. EVs are now sold even in tier-3 cities. The growth rate in tier-2 and tier-3 cities are much higher.
Q3. While the EV market in India has grown from 6.8 per cent to 8 per cent in terms of total vehicles sold, the pace of acceleration seems to be flattening. So, according to you, is the bottleneck more economic (due to high upfront cost) or systematic ( due to infrastructure gap) or is it the lack of policy alignment?
While EV market penetration is growing homogeneously across the country, growth rates are slightly different. There are certain markets where EV growth is very high. Take, for example, Kerala, where EV is growing, but the traditional ICE market is degrowing. Similarly, you have pockets like Delhi, Maharashtra, Punjab, Gujarat, to a large extent, the southern states of Karnataka and Tamil Nadu. These states are already seeing penetration in excess of 5 per cent– which means there is growth. But yes, we have to acknowledge that the EV market has not grown as fast. The pace which was set in the early years, we are not seeing that.
Over the last four-five years, we have continuously localised our components with the firm view that we have to increase value.
Watch video interview:
The evolving Indian EV consumer with Vivek Srivatsa, CCO, Tata Passenger Electric Mobility
On one side consumers are very happy and they buy the new tech, but it also instigates them to keep waiting. They feel that if I wait longer, I will get more value for my money. I’ll probably get more tech, more battery size or better range for the same price or prices might actually go down. We have really worked on the PLI and increased our localisation and passed on the reduced cost to consumers–knowing it is going to enhance EV adoption in the country.
Today, more than 90 per cent of our consumers use home charging, which we install in their parking lot. But it also means that anybody without a private parking spot is not able to buy an EV because we can’t install the charger. And these people depend on public charging. So, public charging within the cities has to really go up. We have several malls, several shopping areas coming up with large options for EV charging.
One is to have large charging banks which are like petrol banks you see from a distance that you have a company owned charging bank, maybe 10, 20 charging guns available, a series of cars already being charged.
On the policy side, governments– Union and states–announce the intent of an EV policy, but it never comes through. Even people who are willing to buy hold their purchases, waiting for the policy to get implemented. But that implementation takes years sometimes. There are many regions where the government’s intent announcement has actually caused the EV market to dip then go up.
Q4. How pivotal is the public charging system to making a purchase decision for an EV consumer? And beyond quantity, what aspects of infrastructure in terms of availability, reliability, digital experience are key to meeting real customer expectations?
Not yet. Even the most advanced countries, like China, or the European countries, Nordic countries or even in the US–while they are well ahead of the curve in terms of where we are in terms of charging infrastructure–it is never seen to be enough. I always say that it is like a mobile telephone network, it is 25 years plus, right? But, even now we say it is not good enough. So that’s going to be the challenge with charging infrastructure–it is never going to be enough.
We need to identify pockets within the cities where people can access public charging. Take areas like malls, shopping centers, office complexes, where cars are anyway going to be idle and they can be charged. I should know as a consumer that if I go there, the charger will be available and it will be functional. This can be solved by tech. Today we have our app where people can actually plan their trip. If I have to go from Mumbai to Delhi, the app tells me what is the charge left in my car and which are the areas that I, which are the chargers I can actually access.
Q5. How seriously are consumers evaluating sustainability in their purchase decision? Has it really gone beyond environmental messaging? Have we seen a transition from consumer mindset that has moved from focusing on initial purchase cost to total cost of ownership and life cycle value?
An EV buyer inherently does think of life cycle value as EVs are more expensive than relative ICE products. Anything between 10 to 25 per cent more expensive. And, it is because they are calculating their lifetime ownership costs where EVs have significant savings both in the fuel costs but also maintenance costs. If I assume comfort in driving and lack of noise and pollution, all that also comes as benefits. So, there is an increasing awareness of the benefits of EVs–not just in monetary terms, but also in terms of comfort and sustainability.
Q6. Products like the Tiago EV are reflective of Tata’s journey to make EV buying affordable in India. How are you balancing the twin imperatives of affordability and innovation in a product, especially when the consumer expectations and the competition are always evolving?
The Tiago EV was a leap of faith for us. Getting an EV to be so accessible was always a challenge. But we also thought that it is the best way to get people considering EVs early in their car ownership cycle. So, we went ahead with very attractive pricing at launch. But subsequently, thanks to intense work by our manufacturing & engineering teams, we have been able to avail the PLI benefit on Tiago, thereby making it more accessible for consumers.
We were always very clear that we are not going to give a compromise product with the Tiago for consumers. We’ve sold more than half a million of Tiagos in the market in the ICE forms. It has been through intent safety rating earlier in its life cycle–achieving the four star GNCAP. So, consumers are extremely confident. In the Tiago EV, we have given it all features from probably two or three segments above in the ICE category.
Q7. The Indian government has targeted a 30 per cent EV penetration by 2030. So, what are going to be the non-negotiable enablers–policy, supply-chain readiness or consumer education–to make this dream a reality?
Considering that EV is the only true source of zero-carbon emission mobility in the future, the government has to be committed to that and not take half steps towards it. The Union government has been very stable in its take-off, giving GST benefits to EV buyers to soften the price gap. But there has to be continuity and there has to be a single-minded focus in that direction.
There are a lot of question marks around supply chain stability and readiness and whatever the government can do in terms of encouraging localisation would be hugely beneficial for manufacturers. If the manufacturer has to invest in more and more localisation, there has to be government support and government encouragement over a long period of time; it shouldn’t be time-bound because setting up a plant or working towards localisation of a project takes a long time. The automotive industry has a long lead time and sometimes policy frameworks don’t align to the same timeline.
Q8. Looking ahead, what long-term shifts do you think will shape the EV consumers behaviour in India the most? Is it going to be shared mobility or solid state batteries or vehicle-to-grid tech–or something completely different?
I think the main focus should be localising. It automatically means reduced costs, and once costs come down, either the consumer benefits with the lower price–which is not necessarily what the Indian consumer wants– but probably that localisation releases a lot of value to the consumer.And, if the value is there intrinsically in the value chain, it can either benefit, additional technology for the consumer at the same price or financial products which enable shared mobility and other models.
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