Addressing the Range Anxiety in EV is the key to success

This article is written with the firm belief that adopting a cleaner mode of private transport is a straightforward step that should be taken at the individual level.

Accept it or not, climate change is evident, and we have significantly less time to reverse it. Any further delay in the same would escalate the situation beyond our control. We have over seven years until our carbon budget is depleted. The global climate impacts would be very high, and it couldn’t be managed anymore. Electric mobility is one of the few tools available to us to act. India is one of the over 50 countries that have started working towards the institutional level mass deployment of electric vehicles (EVs) by notifying policies. While informing an approach is vital and is a step in the right direction, the policy needs to evolve continuously for it to be adopted by the public and create an impact on the ground.

India being a union of states, the states have authority and liberty to have their policies suiting the conditions of the state. In India, over a dozen states have enacted their policies are seriously trying to play their role in the EV movement. One thing is evident that almost 100 percent of the population in the country do know about EVs and know the importance of EVs in combating climate change. The People also know about EVs’ cost economics and benefits over ICE vehicles over the years. At the same time, the penetration of EVs is not as expected. This paper attempts to understand the public perception of the adoption of EVs and the reasons behind the same.

A survey has been undertaken in the forums like LinkedIn Twitter and using tools like google docs in the 2nd week of January 2022. A total of 612 responses are received from people across the country and professions. It is encouraging that 79 percent of the sample prefer EVs over Petrol or CNG vehicles. 13 percent of the model opined that they would purchase petrol vehicles, and 8 percent would purchase CNG vehicles. But the concerning aspect is that 48 percent preferred EVs over ICEs would buy it after five years.

The transport sector accounts for 13.5 percent of India’s energy-related CO2 emissions, and road transport accounts for 90 percent of the transport sector’s final energy consumption [1]. Let us consider that 4W contributes to at least 20 percent of the total emissions contributed by the road transport sector. Let us assume that the respondents represent at least 25 percent of the Indian perception, i.e., 2.4 percent of the total emissions in the country are probably from the 4W segment. India emitted a whopping 2,411.7 million tonnes of CO2 in 2020 [2], which makes the country’s share of 4W 58.6 million tons. Further math on the contribution to temperature? I leave it to the readers. This article is written with the firm belief that adopting a cleaner mode of private transport is a straightforward step that should be taken at the individual level. But with baggage like higher capital costs, range anxiety, and uncertainty in insurance and warranty terms, it will be the responsibility of the government to address at least some of the concerns. 

To further dissect the public perception, 76 percent of the North Indian population, with a majority from NCR, are interested in EVs, of which 56 percent want to buy EVs after five years. The interesting case is that out of the 56 percent who responded with “EVs after five years,” at least 50 percent have CNG cars. In southern states with significantly less CNG penetration, 88 percent of the respondents showed interest in EVs. 33 percent of which are interested in buying the vehicle immediately, whereas 55 percent indicate the purchase decision will be made after five years. In Western and Eastern states, the population interested in EVs is similar to that of Pan India, with 72 percent and 77 percent, respectively. Respondents who wish to buy EVs in the immediate future are encouraged by 41 percent and 44 percent, respectively.

The survey also captured the occupation of the respondents with only three choices, viz., engineer, management, and others, which included professions like lawyers, doctors, authors, content creators, etc. The management comprises domains like strategic management, finance, marketing, policy advocacy, etc. Capturing occupations is essential to understand if the respondents work in the field to capture the acceptance of the technology and economics around the intervention. Of the respondents, citizens involved in occupations related to human resources, finance, marketing, policy advocacy on sustainability, climate change, fin-tech, edu-tech, etc., make up 57 percent and 36 percent of the respondents, respectively, working in core engineering and conventional IT roles. 7 percent of the respondents are currently working on profiles of lawyers, doctors, authors, content creators, etc.

This assessment now leads to a stage on what needs to be done to minimise that “After Five Years”. Another survey was undertaken to understand what drives an average consumer to buy an EV. A report, “Banking on Electric Vehicles in India”, co-authored by NITI Aayog and Rocky Mountain Institute (India), The report also suggests that priority-sector lending can help unlock the EV financing market of ₹ 40,000 crore by 2025 and achieve the COP26 targets. In addition, the report indicates electric two-wheelers, three-wheelers, and commercial vehicles as early segments to prioritise. This report prompted me to understand the perception of private passenger vehicles (4W) on getting discounted car loans. 721 responses were received in the third and fourth weeks of January on LinkedIn and Twitter. After validation, 587 responses are identified as individual responses.

The question posed for the survey is “Would lower interest rates (probably by 1 percent-3 percent) on EVs make you buy an EV?” with options “Yes” “1-3 percent doesn’t make a difference” “Need EV charging stations” “I don’t know”. Of the responses, only a third of the respondents said “yes,” and 42 percent said more than interest rates; their purchase decision depends on addressing range anxiety issues, i.e., “need EV charging stations.” The remaining 25 percent of respondents stated that a 1 percent-3 percent reduction in interest rates makes no difference, and 4 percent were unsure about the driving factors in purchasing an EV.

To re-iterate, I own a petrol passenger car and purchased the vehicle in May 2021; I had the option of buying a Nexon EV. But the upfront capital cost and range anxiety issues were the primary reasons. After almost ten months of driving over 15,000 km and carefully recording the cost of fuel burned, I have realised that I have spent around 1.10 lakh rupees, mainly travelling to Nagpur and Goa, apart from driving in Hyderabad. Commercially, though I could have saved significantly if I had gone for the Nexon EV, I wouldn’t have travelled 15000 km as I couldn’t have managed to charge my vehicle adequately.

Here comes my conclusion that, more than any attempt to reduce the capital cost of an EV, range anxiety issues need to be addressed first. With companies like Fortum, Magenta, and Tata dealer located EVCS, range anxiety issues for urban driving are sorted. But, the idea floated by the Department of Heavy Industries of having EVCS every 25 kilometres needs to be materialised. Furthermore, public sector OMCs can bet big on investing in EVCS in their existing outlets. Independent financial models suggest that returns of around 20 percent can be made with the current tariff charged by commercial charge point operators.

Expertise shared by Prof. Siddartha Ramakanth Keshavadasu,
Asst. Professor, Centre for Energy Studies,
(Administrative Staff College of India) and
Prof. Rajkiran Bilolikar, Director, Centre for Energy Studies,
Administrative Staff College of India.