Green Marketing – E Vehicles,

Factors affecting EV adoption over IC Engines in India

Saransh Pandya
(1927217)

Under the guidance of:

Prof. Prabha Kiran

Institute of Management
CHRIST(Deemed to be University)
April, 2020
 TABLE OF CONTENTS

 Abstract

 Introduction

 Background and context

 Relevance and Importance of the research

 Scope of the study

 Objectives of the study

 Problem statement

 Literature review

 Gaps in existing knowledge

 Research design and methods

 Practical Implications

 Bibliography

Green Marketing- E Vehicles, factors affecting EV adoption over IC engine in India

Saransh Pandya | CHRIST (Deemed to be University)
ABSTRACT
Electric vehicles (EV) comes with the potential to decrease green-house gas emissions and help ease
the causes of climate change. However, externalities including the appropriability of knowledge and
decreasing pollution result in societal/economic benefits that are not incorporated in electric vehicle
prices. In order to address resulting market failures, governments have employed a number of policies
such as FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India). We seek
to determine the relationship of one such policy instrument (consumer financial incentives) to electric
vehicle adoption. Based on existing literatures, we identified several additional socio-economic factors
that are expected to be influential in determining electric vehicle adoption rates. The model found
financial incentives, charging infrastructure, and local presence of production and service facilities
Expectedly, factors like charging infrastructure was most strongly related to electric vehicle adoption.
However, descriptive analysis suggests that neither financial incentives nor charging infrastructure
ensure high electric vehicle adoption rates.

Keywords: Charging Infrastructure; EV Marketing; Customer Perception; Consumer Buying

Behaviour; Batteries reliability.
INTRODUCTION

According to IBEF, India became the fourth largest auto market in 2018 with sales increasing 8.3 per
cent year-on-year to 3.99 million units. It was the seventh largest manufacturer of commercial
vehicles in 2018. Electric vehicles come in two different categories PHEV & BEV. Plug-in Hybrid
Electric Vehicles (PHEVs) can draw power from a battery as well as liquid fuel but not simultaneously.
Battery Electric Vehicles (BEVs) are solely powered through electricity. Electric Vehicles (EVs) either
reduce or entirely negate gasoline or diesel use in the vehicle itself through integration with the electric
grid. Both provide the opportunity for power-sharing with the electric grid and can potentially ease the
integration of sources of intermittent renewable energy. EVs are also a potentially important technology
to help reduce greenhouse gas (GHG) emissions, local air pollution, and vehicular noise. For a while,
we’ve been talking about upcoming electric vehicle launches and the benefits of owning an EV.
Electric cars are the industry’s hot topic at the moment, especially as many automakers have
announced ambitious electrification plans for the coming years. But this excitement contrasts with a
shocking reality: in H1 2019, internal combustion engines accounted for more than 90% of passenger
car global sales. IC Engine works on the fossil fuels (petrol and diesel) and because of which it
contributes to the increase in the GHG. In this study, we would be identifying the factors which are
playing the prominent role in the purchase of Internal Combustion Vehicle.

BACKGROUND & CONTEXT

Road EVs include a large range of vehicles from electric two-wheelers, three-wheelers (rickshaws),
cars and electric buses. In addition, plug-in electric vehicles can be classified into two types: battery
electric vehicles (BEVs), and plug-in hybrid electric vehicles (PHEVs). BEVs have an electric motor
in place of combustion engine and use electricity from the grid stored in batteries. Plug-in hybrid
electric vehicles (PHEV) use batteries to power an electric motor and liquid fuel such as gasoline or
diesel to power an internal combustion engine or other propulsion source. EVs can go beyond the
above-mentioned technology-based classification, and can be classified on the basis of their attributes
such as i) charging time, ii) driving range, and iii) the maximum load it can carry. Of these attributes,
the two most important characteristics of an electric vehicle of concern to the consumer are: -
1.Driving range (i.e. the maximum distance an EV can run when fully charged)
2.Charging time of batteries (i.e. the time required to fully charge the battery) and Charging time
depends on the input power characteristics (i.e. input voltage and current), battery type, and battery
capacity.

Thirteen out of 20 cities in the world with highest air pollution are in India. It is envisaged that Low
carbon scenario with ‘highest’ EV penetration shows 50 percent drop in PM 2.5 by 2035 (UNEP, DTU
and IIM-A). Master plans for most cities in India target 60-80 per cent public transport ridership by
2025-2030 (Center for Science and Environment).
RELEVANCE & IMPORTANCE OF RESEARCH

This research would help the industry people to identify the factors that the customers are concerned
before purchasing the EV. Why India is still lagging behind in the sale of the EVs knowing the fact it
has a lot to offer and also is taking care of the environment. What steps companies can opt for in the
marketing of the EVs to boost the sales.

SCOPE OF THE STUDY

Companies before approaching the customers would take care of all the concerns that can rise in
the customer’s mind before purchasing an EV. Once the queries regarding the installation of
charging stations and the infrastructure of the station is resolved it will be easier to convince the
customer. Also, the cost of travelling can come down to 1.5Rs/km which currently is 3.26Rs/km
considering the LMV segment.

RESEARCH OBJECTIVES

1.How much concerned is the customer about the infrastructure and time for the charging?
2.To understand whether the customer needs more exposure of driving EV vehicles before buying?
3.To understand expectations of the customer from the companies EV models?
4.Is Marketing campaign of the EV effective in India?
5.Batteries (Lithium Ion) used as a source of power can it be made available at a cheaper cost?

PROBLEM STATEMENT
The research estimates that vehicle tailpipe emissions were linked to about 361,000 premature deaths
from ambient PM2.5 and ozone worldwide in 2010 and about 385,000 in 2015. An estimated 70 per
cent of these impacts occurred in the four largest vehicle markets in 2015: China, India, the European
Union, and the US. Exhaust from on-road diesel vehicles was responsible for nearly half of the
impacts -- about 181,000 premature deaths -- worldwide, and fully two-thirds in India, France,
Germany and Italy. The distribution of health impacts and air pollution from transportation is
influenced by policy, demographic, economic, and technological changes. So as to offer the cleaner
source of Transportation we want to know the factors affecting the adoption of E vehicles in India.
There can be many factors for the non-purchase of electric vehicles in India such as Cost of EV,
Infrastructure, after sales services, exposure of EV before purchase, Driving range, Charging
time for batteries.

LITERATURE REVIEW

Whether a consumer is “environmental sensitive” is captured by a wide range of differing indicators

within the literature. Hidrue et al. (2011) found that while pollution reduction is a valued attribute of
EVs, it is valued considerably less than performance indicators. The authors found that people valued
a 50% reduction in pollution (relative to a gasoline vehicle) by about $1,900 and a 95% reduction by
 $4,300. Sierzchula et al. (2014) found neither education, gender, nor environmentalism to be
significant in determining EV market share within a country. In a survey of EV drivers in the UK,
Burgess et al. (2013) found some evidence of a ‘green image’ effect on attitudes toward EVs.
Studies have concentrated on potential users and applied either qualitative methods (e.g. ABF –
morphologische marktanalysen, 2010; Graham-Rowe et al., 2012; Peters & Hoffmann, 2011) or
quantitative methods (Anable et al., 2011; Go¨ tz et al., 2011; Lieven et al., 2011; Ziegler, 2012) to
identify the most likely early adopters or the most attractive vehicle concepts. For example, a stated
choice survey by Ziegler (2012) indicates that the majority of potential car buyers still prefer
conventional vehicles to EVs. Those who rate EVs and other alternative propulsion technologies as
preferential are younger and more environmentally aware than the average participant. Anable et al.
(2011) surveyed consumers in the UK and identified several groups who are likely to adopt an EV,
but who differ in their motives.

According to a recent study done in The Netherlands by (Ecofys, 2016), plug-in hybrid vehicles with
a limited battery capacity should, from a total cost of ownership perspective, lose popularity quickly.
This is the case because the Dutch government is reducing tax incentives for hybrids. Furthermore,
due to the quickly decreasing battery costs the hybrids can soon not compete anymore with BEVs
from a cost perspective. For convenience purposes it is expected that consumers will still consider
them. However, in this study we focus on all-electric BEVs as factors like range anxiety are expected
to be more measurable due to the lack of an ICE.

The purchase price of an EV is one of the financial factors that can affect the intention to buy EVs
(Delang & Cheng, 2013; Lane & Potter, 2007). The price of EVs tends to be higher than conventional
vehicles and could deter EV adoption (Edelstein, 2017). For example, a Ford Focus
2017 gasoline version base model costs US$16,775 whereas Ford Focus 2017 electric version costs
US$29,120 (U.S. News & World Report, 2017). The high price of the EV is partly due to the high
cost of electric-power train and Li-ion battery. Although the cost of Li-ion battery packs from 2007
to 2014 has declined by around 14%, the price is still high: US$ 300-410 per kWh (Nykvist &
Nilsson, 2015).
Eggers and Eggers (2011) forecasting EVs as having the potential to achieve 25.8% of all new car
sales in the German market in 2018 under conditions of price parity, decreasing to 8.2% if EVs have
a 20% purchase premium. A similar result is observed by Krause et al. (2016), whose assessment of
vehicle preferences in the USA found that 44% of consumers would select a pure battery EV under
the conditions of price and performance parities. The high costs associated with the production of EV
battery packs are often cited as the primary source of EV price premiums and thus one of the main
inhibitors of adoption (Axsen et al. 2010; Hidrue et al. 2011). Examining the future cost trajectories
of EV battery packs, Cluzel and Douglas (2012) find that, by 2030, costs of production have the
potential to decrease to $215 per kilowatt hour with similar estimates noted by Offer et al. (2010)
who found that, by 2030, EVs have the potential to exhibit significantly lower lifecycle costs
compared to conventional internal combustion engine vehicle.

GAPS IN EXISTING KNOWLEDGE

Limitations observed while conducting this Literature review were:

 Research focusing on the relationship between the distribution of charging infrastructure within a
country and its EV adoption rate. (William Sierzchula, Sjoerd Bakker, Kees Maat, Bertvan Wee)
 Understanding the type of electric motors used to develop a power source which proves to be the most
efficient and reduce emission levels. (Mr. A. Rakesh Kumar, Dr. Sanjeevikumar Padmanaban)
 The adoption of EVs by fleet managers in different countries with different governmental incentives
to identify the factors that influence the fleet manager’s adoption decision. (Zeinab Rezvani, Johan
Jansson, Jan Bodin)
 The segments which were most likely to consider an EV on their introduction are similar to those
most likely to consider a HFCEV. (Dr Craig Morton, Dr Jillian Anable, Prof. John Nelson)
 The possibilities for revealed preference studies focusing on policy and EV-adoption are likely to be
limited to general comparative studies across different countries with different policy packages being
offered. (JoramH.M.Langbroek, Joel P.Franklin, Yusak O.Susilo )

RESEARCH DESIGN AND METHODS

Quantitative & Qualitative methods will be used. If possible, will work on the focused group data
as well.

PRACTICAL IMPLICATIONS OF THE STUDY

Companies can approach the customers at the time they willing to buy a new vehicle and make them
understand the benefits of the EV. Also, the queries regarding the installation of charging stations and the
infrastructure of the station can be resolved so the customers can consider EV as an option.

BIBLIOGRAPHY

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Machaj, K., Malecha, Z., & Wrzecioniarz, P. (2020). Numerical and Analytical Study of a Battery
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Kumar, M. A. R., & Sanjeevikumar, P. (2019). Electric Vehicles for India: Overview and
Challenges. IEEE India Council Newsletter.
Morton, C., Anable, J., & Nelson, J. D. (2017). Consumer structure in the emerging market for
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