Branding gone wrong! Promotion of EVs in India

Introduction

The electric vehicle (EV) market in India experienced a significant setback in June 2024, with a 14% drop in sales compared to the previous month. Despite a 20% increase in year-over-year sales for June, the figures signal underlying challenges in the EV sector. Changes in government policies, shifting consumer preferences, and increased interest in hybrid vehicles have contributed to this decline. This blog explores the reasons behind the faltering EV sales, the branding and promotional missteps, and the necessary steps to rejuvenate the EV market in India.

What Went Wrong?

1. Policy Changes and Reduced Subsidies

One of the primary reasons for the decline in EV sales is the reduction in government subsidies. In 2023, the subsidy for electric two-wheelers (e2Ws) was slashed from approximately Rs 60,000 to Rs 22,500, leading to a significant price increase. This year, the subsidy was further reduced to Rs 10,000 under the Electric Mobility Promotion Scheme 2024 (EMPS 2024). Such abrupt policy changes have created uncertainty and increased the cost burden on consumers, deterring potential buyers.

2. High Initial Costs

The reduction in subsidies has widened the price gap between electric and petrol-powered vehicles. With e2Ws accounting for 57% of the EV sales in 2024, any fluctuation in their prices significantly impacts overall EV sales. The increased costs, coupled with the relatively high prices of EVs, make them less attractive to price-sensitive consumers.

3. Inadequate Charging Infrastructure

The lack of a widespread and reliable charging infrastructure continues to be a significant barrier to EV adoption in India. Consumers are hesitant to switch to EVs due to concerns about the availability and convenience of charging stations, especially in non-urban areas.

4. Consumer Awareness and Perception

There is still a considerable lack of awareness among consumers about the long-term benefits of EVs, including lower running costs and environmental advantages. Additionally, the perception of EVs as less reliable and having limited range persists, further hindering their adoption.

Steps to Rejuvenate the EV Market

1. Stable and Attractive Government Policies

The government needs to provide stable and attractive policies that encourage EV adoption. Reintroducing and enhancing subsidies for EVs, particularly for e2Ws, can make them more affordable and attractive to consumers. Long-term policy stability is crucial to build consumer confidence and encourage investment in the EV sector.

2. Investment in Charging Infrastructure

A robust and widespread charging infrastructure is essential for the growth of the EV market. Public and private sector collaboration can expedite the development of charging stations across urban and rural areas. Incentives for setting up charging stations can also encourage businesses to invest in this critical infrastructure.

3. Affordable Financing Options

Providing affordable financing options for purchasing EVs can alleviate the high initial cost burden. Financial institutions can collaborate with EV manufacturers to offer low-interest loans and attractive EMI schemes, making EVs more accessible to a broader audience.

4. Consumer Education and Awareness Campaigns

Comprehensive consumer education and awareness campaigns are vital to dispel myths and highlight the benefits of EVs. These campaigns should focus on the long-term cost savings, environmental benefits, and advancements in EV technology. Collaborating with influencers and leveraging social media can amplify these messages.

5. Innovative Marketing Strategies

EV manufacturers need to adopt innovative marketing strategies to appeal to different consumer segments. Highlighting the unique selling points of EVs, such as zero emissions, lower running costs, and advanced technology, can attract environmentally conscious and tech-savvy consumers. Offering test drives and experiential events can also help consumers experience the benefits of EVs firsthand.

Should Companies Continue Focusing on EVs?

Despite the current challenges, the future of EVs in India remains promising. The global shift towards sustainable transportation, advancements in EV technology, and the growing awareness of environmental issues will continue to drive demand for EVs. Companies should not only continue but also intensify their focus on EVs. By addressing the current challenges and implementing strategic measures, the EV market in India can achieve sustainable growth and contribute to a cleaner, greener future.

Conclusion

The decline in EV sales in June 2024 highlights the challenges facing the Indian EV market. However, with the right policies, investments, and marketing strategies, these challenges can be overcome. By focusing on affordability, infrastructure, consumer education, and innovative promotion, the EV market in India can be revitalized, paving the way for a sustainable and prosperous future.