As we rev into 2024, electric cravings appear to be waning relative to hybrid vehicles, indicating a shift in India's auto landscape, marked by persistent charging challenges and the surging appeal of hybrids
A recent Deloitte study has revealed a surprising mood swing in the Indian market, reporting a decline in the 'purchase intent' for electric cars. Though the dip is marginal, the findings signal a shift in the automotive landscape, with the percentage of respondents expressing a preference for EVs as their next vehicle falling from 54 percent at the start of 2023 to 48 percent by October. Significantly, the cool-off is despite an influx of new electric car models hitting the Indian market this year.
As of December 2023, the mass-market space featured only five hybrid cars: the Honda City e: HEV, Toyota Urban Cruiser Hyryder and Innova Hycross, and Maruti Suzuki Grand Vitara and Invicto. In stark contrast, there were ten electric vehicle models, including the Tata Nexon EV, Tiago EV, Tigor EV, Mahindra XUV400, MG ZS EV, Comet EV, Citroën eC3, BYD Atto 3, Hyundai Ioniq 5, and Kia EV6.
Looking ahead to 2024, the trend is set to continue, with no new hybrid cars expected to launch, while the market anticipates the arrival of several exciting electric models such as the Kia EV9, Tesla, Mahindra XUV.e8, Tata Curvv EV, Harrier EV, Safari EV, and Punch EV.
Deloitte's Rajeev Singh, Partner and Consumer Industry Leader at Deloitte Asia Pacific, sheds light on the unexpected shift, stating, "Despite this wide choice, the purchase intent for EVs has come down." Singh attributes this decline to challenges related to charging infrastructure, growing awareness of high battery replacement costs, lower resale values, and concerns about the disposition of electric vehicles in India.
While electric vehicle manufacturers have long touted lower total cost of ownership (TCO) as a significant advantage, this doesn't translate into increased sales.
Studies by automakers like Tata Motors and MG Motor India indicate that the running cost of an EV can be as low as Rs 1 to Rs 1.5 per km, compared to Rs 5–6 per km for diesel cars. However, the higher initial cost of EVs, mainly due to expensive batteries, remains a deterrent for many buyers.
Interestingly, consumer sentiment for hybrid cars is on the rise. With their exceptional fuel efficiency and the flexibility of running electric vehicles for a significant portion of the time without the need for extensive charging infrastructure, hybrids are gaining popularity among Indian consumers.
In an earlier study this year, Deloitte highlighted that the primary driver for choosing an EV was 'lower fuel costs,' followed by 'better driving experience,' 'less maintenance than ICE cars,' and 'using the vehicle as a power source.' Concern for climate change was a distant fifth on the list, emphasising the pragmatic considerations influencing consumer choices in the Indian automotive market.
As the wheels of change continue, 2024 promises to be a pivotal year, with electric cars and hybrids vying for dominance in a dynamically evolving automotive landscape