Mobility Energy and Transportation
Why Consumers go electric
03 Jun 2025
India’s passenger vehicle (PV) market is
undergoing a quiet but powerful transformation. While early EV adoption was
largely driven by policy push, the momentum today is shaped increasingly by
consumer pull. Buyers are now making informed, value-conscious decisions, and
electric vehicles are rapidly emerging as the preferred choice, especially in
urban India. This newsletter explores five key reasons why Indian consumers are choosing to go electric.
1. Total cost of ownership (TCO) advantage
For the cost-conscious Indian PV buyer, the
long-term economics of EVs are increasingly attractive. Despite a higher
initial price tag, electric vehicles offer lower fuel and maintenance
expenses, often making them cheaper to own and operate over five years.TCO goes beyond just upfront costs; it factors
in subsidies, routine running expenses, annual maintenance, and resale value.
As demonstrated in Exhibit 1, EVs already outperform
internal combustion engine (ICE) vehicles on TCO across most urban PV
segments. Even without subsidies, both electric 2Ws and 4Ws offer cost
advantages, making TCO one of the most powerful rational levers for adoption.
Exhibit 1: Total cost of
ownership comparison
2. Other financial enablers
Beyond TCO, a suite of financial incentives significantly reduces the upfront cost burden for EV buyers. These include FAME-II subsidies, road exemptions, registration fees waivers, and income tax deductions up to INR 1.5L under Section 80EEB of the Income Tax Act. Additionally, interest-free loans for government employees (till December 2025) and subsidized EV loans from private banks have further boosted affordability.
As shown in Exhibit 2, these measures are not
only making EVs more accessible but are also accelerating early adoption across
multiple consumer segments.
Exhibit 2: Financial enablers driving EV adoption
3. Refuelling convenience
One of the most overlooked benefits of EV ownership is the ease of home
charging. For many urban buyers with private parking, overnight charging
eliminates the hassle of fuel station visits and ensures a full charge
every morning. Just as importantly, EV charging offers predictable costs
compared to the volatility of petrol and diesel prices. With charging options
expanding, from homes to offices and public stations, refuelling is becoming more
flexible and user controlled.
As shown in Exhibit 3, EVs are enabling a shift
to cleaner, more convenient, and more future-ready energy experiences, which
are redefining consumer expectations around vehicle ownership.
4. Lower
maintenance and simplified servicing
EVs bring a simplified ownership experience.
With no engine oil, spark plugs, or gearboxes, there are fewer
components to fail, resulting in lower service costs, fewer
garage visits, and longer maintenance intervals. But the value goes
beyond savings. With the improvement in EVs owners will experience a greater
sense of reliability, reduced anxiety about breakdowns, and faster
diagnostics and resolutions.This simplicity of EV maintenance is not just a
financial benefit; it is a key emotional driver of satisfaction and peace of
mind
Exhibit 4: Maintenance needs comparison – EVs vs
ICE vehicles
5. Driving experience: Performance, range & technology
Modern EVs offer a superior driving
experience. Instant torque, quiet acceleration, and regenerative
braking make daily driving smoother and more engaging. Meanwhile, smart
features such as OTA updates, app-based diagnostics, and digital dashboards
offer a tech-enabled edge. Battery range is also no longer a barrier.
With most models now offering 300–500+ km, EVs match, and in some cases,
exceed ICE performance for daily urban and even intercity travel.
Exhibit 5:Why EVs deliver a better driving experience
Conclusion
India’s EV transition is no longer just a
policy outcome; it is a consumer-led movement. EVs today are not
only cleaner and cheaper but also more convenient, easier to maintain, and more
enjoyable to drive. As buyer expectations evolve and product offerings mature,
automakers, lenders, and ecosystem players must align with these five key
drivers. Because the future of electric mobility will not be built by what is
technologically possible, but by what consumers actively choose.
For a deeper dive into the analysis behind these
drivers, refer to the full report – Electrify30: The Future of Mobility