Understanding consumer mindset behind 2-wheeler EV adoption in India

Abstract

The automobile industry is a rapidly growing sector, contributing heavily to the Indian economy. It has a rich history dating back to the 20th century, with players across a range of vehicles—2-wheelers, 3-wheelers, passenger, and commercial vehicles. Indian automobile companies serve both international and domestic markets. The sector contributes 7.1% to the GDP and accounts for 49% of the manufacturing GDP, with an annual turnover of ₹7.5 lakh crores and exports worth ₹3.5 lakh crores.

The industry is increasingly moving toward sustainable solutions and practices, with a strong emphasis on the emerging electric vehicle (EV) market. In recent years, India has been actively embracing the idea of EVs as a game-changing improvement to its transportation system. The country aims to develop cleaner transport options, focusing on reducing pollution and decreasing reliance on fossil fuels. EVs, which run exclusively on electricity stored in advanced batteries, offer a viable solution to address air quality issues and mitigate climate change.

This momentum gained strength after the COP26 summit, where India pledged to meet at least 50% of its energy needs through renewable sources and achieve carbon neutrality by 2070. The Indian government has taken proactive steps to encourage EV adoption by offering subsidies, launching Production Linked Incentive (PLI) schemes specifically targeting electric vehicles, developing EV charging infrastructure, and running awareness campaigns. These initiatives have been effective in overcoming initial hesitations in both the production and adoption of electric vehicles in the country.