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‘Electric cars are the future’ but dealers find it tough to sell

Nandana James Mumbai | Updated on March 19, 2021

Dealers grapple with consumers’ concerns over charging infrastructure and mileage

Even as Puneet Dutt, a Noida-based MG Motors dealer, admits with a sigh that selling electric cars has been a challenging and strenuous task compared to selling gas guzzling cars, he also recounts how customers themselves say often times that “electric is the future”.

“Nowadays, in Delhi-NCR, the petrol price is in triple digits after all, and imagine what the price would be in five years,” he points out. Amid straddling the line between appeasing customers’ anxieties about the charging infrastructure and communicating the benefits of electric cars – which are becoming more apparent with time – electric car dealers in India are in for quite a ride.

Notwithstanding the many positive factors of electric cars, the challenge of an insufficient charging infrastructure looms large, coupled with doubts and uncertainties about electric cars, electric car dealers tell BusinessLine, rendering the road slightly bumpy for electric car dealers in India.

“If the charging infrastructure gets increased, it will be much more helpful to sell electric cars,” says Dutt, who is the EV (electric vehicle) manager at Crystal Autocars Pvt Ltd, an MG dealership in Noida.

Customers raise doubts about driving an electric car on the highway and also about how they will charge once they complete 360-370 kilometers, says Ganesh Biddappa, assistant manager of premium cars at Trident Hyundai, Bangalore, who is involved in the sales of the Hyundai Kona. “They have that fear. So, it will be challenging until DC chargers come up on highways - otherwise customers are reluctant to accept the challenges on electric cars.”

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Customers also have doubts about the replacement cost of a battery and the resale value of electric cars, says Dutt.

But the charging infrastructure has seen an improvement over the past few years, and this has been pivotal in the electric car adoption seeing a positive shift, dealers tell BusinessLine. Various state governments rolling out incentives for EVs, better awareness now compared to the time of electric cars’ launches, the increased affinity for personal mobility amid the pandemic, as well as the cost benefits of electric cars becoming more evident with the soaring fuel prices are some of the other reasons they cite for the positive shift.

Tata Motors’ Nexon EV priced at ₹13.99 lakh, Hyundai Kona (₹23.75 lakh) and MG ZS EV (₹20.99 lakh) are the popular choices of electric cars in the personal segment in India currently.

The high upfront cost of electric cars, which are considerably higher than their petrol and diesel counterparts, is another aspect that dealers deal with. That bigger internal combustion engine (ICE) variants are available at cheaper prices compared to EVs tends to be a matter of concern, but this is also offset by the fuel cost benefits and the performance of electric cars which have an instant torque as well as premium technology, they say.

Biddappa puts it in a realistic way: “There are only limited people who want to buy an electric car. There is the price factor. Who are the people who invest ₹25 lakh? They are premium customers, and for a premium product, you can’t expect huge numbers to happen.”

People are really impressed when the cost savings on fuel are explained to them, dealers say. “Fuel costs shot up over the past one month, and an electric car is any day better. Especially for someone who is driving around 100-plus kilometers a day in the city, it’s going to be very reasonable - because on a Kona electric, you spend close to Rs 1 on a kilometer, which is very reasonable,” says K.B.Niran Thammaiah, head-premium cars, Advaith Motors Pvt Ltd, a Hyundai dealership in Bangalore.

“The higher cost is a bit of a problem. We are not able to target the middle class much - ₹25.6 lakh is the on-road price (for the MG ZS EV), and it’s difficult to explain to them why it’s worth the price. But they will be saving so much - the difference amount can be easily saved in the next few years,” says Anunay Reddy, assistant sales manager at Raam 4 Wheelers LLP, a Hyderabad based dealership of MG Motors.

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But sales have improved compared to the time of the launch, he points out. “In the beginning, we had a few difficulties. After the launch, everyone showed interest, but it later weaned. People actually wait for a year, see reviews and buy afterwards. Now everyone is getting references by word of mouth - every customer’s friends also end up buying,” Reddy says.

The dealership sells around 20-25 MG ZS EVs a month, and February 2021 marked the highest ever sales of the MG ZS EV ever since its launch from the dealership, at 50 units. This positive shift has been perceptible since January-end this year, he adds.

Biddappa also says that people are aggressive about electric cars, with at least 3-4 enquiries pouring in about the Kona on a daily basis at his dealership. Aravind, a senior sales executive at Sree Gokulam Motors, a Tata Motors dealership in Chennai, says that while the Nexon EV at his dealership used to get 30-40 enquiries per month back in June last year, this has now increased to over 140 now.

However, it remains difficult to convince customers coming in for ICE cars to buy an EV instead; most buyers are those who were already looking to buy an EV, they say. A Delhi-based dealer of the Nexon EV says that it’s only one in a hundred customers looking to buy an ICE vehicle who ends up buying an electric car.

“Deciding on an EV all of a sudden while looking at a petrol car is not that common. We have hardly come across anyone looking at an EV that way,” says Thammaiah. As a Bangalore-based Nexon EV dealer puts it: “It all comes down to winning the confidence of customers and understanding their needs and requirements.”

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There are other challenges, too. The pandemic, for instance, has also impacted the sales, with sales per month at his dealership having taken a beating amid the supply constraints, says Biddappa. Several residential apartments’ associations and authorities in the cities are also reluctant to allow the setting up of charging stations at the parking space for EVs, which is yet another hassle customers talk about, he says.

Several Nexon EV dealers BusinessLine spoke to also say that after the controversy surrounding the Delhi government’s suspension of the subsidy to the Nexon EV a few weeks ago, they are also faced with puzzled queries about the actual range of electric cars as the incident has cast light on the range issues associated with EVs.

The optimism, meanwhile, persists. Aravind, for instance, says: “I promise you, within the next 2-3 years, the market will be entirely electric. This year, every OEM is going to introduce electric cars. If you also have a charging station every 70 kilometers, people will definitely switch over to EVs.”

Published on March 19, 2021

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