Economy

Indians willing to pay extra premium for EVs: EY survey

Our Bureau New Delhi | Updated on July 26, 2021

Over 9,000 respondents from 13 countries were part of the survey

Nearly 90 per cent of consumers in India are willing to pay a premium for buying an electric vehicle (EV) with over 40 per cent respondents ready to pay a premium of up to 20 per cent, a survey by EY India said on Sunday.

A majority of the respondents surveyed in India consider a driving range of 100 to 200 miles to be acceptable from a fully charged EV. Existing and future EV owners who intend to buy a car have a relatively higher preference for digital channels compared to the existing and future internal combustion engine (ICE) owners, it revealed.

The latest EY Mobility Consumer Index (MCI) also said that the EV sales are expected to boom over the next 12 months, the survey said.

More than 9,000 respondents from 13 countries including 1,000 respondents from India were part of the survey.

The survey also revealed that the top reason for buying an EV is environmental concern, with 97 per cent also stating that the Covid-19 pandemic has heightened awareness and concerns about environmental issues. It said 67 per cent of those looking to buy an EV feel it is their responsibility to reduce their personal environmental impact, and 69 per cent feel buying an EV is one way to achieve this goal.

“The reducing gap in cost of ownership between electric and other technology platforms and the increasing segment of consumers vocal about environmental impact will drive a fundamental change in consumer buying behaviour for electric vehicles. Consumers are willing to pay extra for an added value of being environmentally responsible,” Vinay Raghunath, Partner and Automotive Sector Leader, EY India, said.

The survey also highlighted that while visiting dealership and showrooms continues to be the dominant choice for buying the car, innovative/ digital retail channels are becoming popular among respondents.

As per the survey, potential car buyers desire an evolved retail experience with a mix of online and offline channels across different stages of their car buying journey as they seek a seamless Omnichannel experience, price transparency, superior purchase experience and visibility into financing options.

It said 49 per cent of the respondents in India strongly agree to complete all the paperwork online rather than at the dealership, while 69 per cent seek an opportunity to get a quote and secure vehicle financing online.

For all countries, the MCI reflects that relatively higher percentage of Gen Z and millennials prefer online channels for car purchase; respondents in medium sized cities are inclined towards online channels for final car purchase.

Som Kapoor, Partner, Automotive sector, EY India said, “Covid-19 has accelerated changes like digitalisation in the auto retail ecosystem. This change is a significant opportunity for manufacturers and dealerships to streamline their operations by unlocking capital from redundant infrastructure, while taking on a wider service portfolio that contributes to better margins.”

Published on July 25, 2021

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