The Indian automotove market is witnessing a dynamic shift in preferences as almost 50% of consumers are looking to move away from Internal Combustion Engine (ICE) technology, a Deloitte study revealed. A total of 1,000 consumers were surveyed by the agency for its 2024 Global Automotive Consumer Study (GACS), of which 24% showed interest in adopting hybrid technology in their next vehicle purchase. Preference for Hybrid Electric Vehicles (HEVs) has seen an uptick from 20% last year.
The study highlights the intention of the discerning consumers to move away from combustion engine vehicles and explore other alternate power technologies. However, the transition from intention to reality may take some four to five years. “For the first time, we have seen that the intention to buy an ICE engine has gone below 50%, and this is a very positive trend,” said Rajeev Singh, Partner and Consumer Industry Leader, Deloitte Asia Pacific.
Consumer interest in electric vehicles (10%) continued to improve but prefernce for hybrid technology remained stronger given concerns such as charging time, availability of charging infrastructure, and safety of battery technology. The primary attraction towards EVs continues to center on a perception that they are environmentally good and have lower fuel and maintenance costs. Other factors such as driving experience, government incentives, and ability to use the vehicle as a power backup influence those intending to buy battery-powered vehicles. “Despite a positive trend in EV adoption, infrastructure remains crucial for sustainability. Consumers are eco-conscious and look to OEMs committed to sustainability,” said Singh.
Out of those intending to switch to an all-electric vehicle in their next purchase, 66% said they intend to charge their vehicles at home while 22% said they plan to charge at public charging stations. The study also underscores the importance of fast charging and the need to simplify payment methods while charging. Most consumers said they prefer simple traditional credit/debit card payments or other familiar payment methods.
Apart from charging time and infrastructure, one-third of surveyed consumers cited vehicle cost and battery replacement costs as the biggest hurdles in owning an electric vehicle.Consumers also look forward to responsible battery management systems or dedicated battery recycling companies. They believe that EV battery makers, and vehicle dealers should be primarily responsible for collecting, storing, and recycling EV batteries after their useful lives. Use of recycled materials will also help bring down the cost of batteries, which constitute the most in cost of a vehicle.
Another major factor influencing consumers’ purchase decisions is affordability as 80% consumers still expect to pay less
than INR 25 lakhs for their next vehicle. EV intenders, however, seem to be more inclined towards paying a premium, looking at vehicles in the range of INR 10-15 lakhs.
In terms of range of an electric vehicle, 50% of the surveyed consumers expect an output between 200 and 400 kilometres while 40% expect the range to be more than 400 kilometres, depending on usage.