Electric vehicles have a long way to go in India: Deloitte study

A study on the prospects of Electric Vehicles conducted by Deloitte Touche Tohmatsu Ltd has estimated the current potential of the Indian market at 4 per cent of the annual car sales in the country (or about 100,000 vehicles).

The study finds that the Indian customer does not want to pay a premium for an electric vehicle.

“Overwhelmingly, respondents disagreed with the notion of paying a premium for the technology that is clean and can mean energy independence….about 20 per cent of the customers would be willing to pay about 10 per cent more as premium,” the study says.

The survey responses for India indicate that if prices of fuel went beyond Rs 85 a litre, 71 per cent of the respondents were likely to consider an EV, it says.

“As such, India is a mere Rs 12 away for fuel to become expensive enough for customers to consider alternative power technologies,” it says.

Similarly, if cars that run on conventional engines deliver as much as 32 km a litre, almost 74 per cent of the respondents “are less likely to consider an EV”.

This, the survey says, is pretty much the same in most countries.

Indians also expect their batteries to be charged fully in two hours and expect a per charge travel in the range of 4-6 times the average distance they travel daily – which comes to about 320 km.

“This indicates a gap in expectations versus current EV range capabilities in India,” the report says.

Releasing the report to journalists here, Mr Kumar Kandaswami, Senior Director, Deloitte, noted that Mahindra Reva is working on bringing out a car that can run 200 km after one full charge.

(The vehicle, coded ‘NXG' was showcased last year at an expo in Frankfurt. Mr Chetan Maini, Chief of Technology and Strategy, Mahindra Reva, told Business Line today that the vehicle is still “under development”.)

The Deloitte report, however, has nothing to say about the impact of improvements in public transport systems – which ought to help EVs because the vehicles would be used to cover shorter distances.

Nor does the report say anything about how things might pan out when hybrid or solar-supported electric vehicles hit the market.

What also came up in discussions with Mr Kandaswami was that the life of battery, generally about 5 years after which it would need to be changed. The cost of the battery could be about 30 per cent of the cost of the vehicle itself.

Today, the least-cost vehicle from Mahindra Reva costs around Rs 3.5 lakh.