Around 90% of consumers in India ready to pay premium to buy EV: EY survey

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

By:July 27, 2021 8:40 AM
It is a fact that is not easy to do business in India and the government must try and address the many issues, among them, red tape and poor infrastructure.It is a fact that is not easy to do business in India and the government must try and address the many issues, among them, red tape and poor infrastructure.

Indicating that the electric vehicle (EV) market is moving into high gear, nearly 90% of the consumers in India are willing to pay a premium for buying an EV. Over 40% of respondents are ready to pay a premium of up to 20%, according to the latest EY Mobility Consumer Index (MCI). A majority of the respondents surveyed in India consider acceptable a driving range of 100 to 200 miles 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 ICE owners.

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

Vinay Raghunath, partner and automotive sector leader, EY India, said, “The reducing gap in the 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. The consumers are willing to pay extra for an added value of being environmentally responsible.”

While visiting dealerships 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.

49% of respondents in India strongly agree to complete all the paperwork online rather than at the dealership, while 69% seek an opportunity to get a quote and secure vehicle financing online. For all countries, the MCI reflects that a 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 a 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 OEMs and dealerships to streamline their operations by unlocking capital from redundant infrastructure while taking on a wider service portfolio that contributes to better margins.”

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