Our survey reveals that 70% of commercial fleet owners are still wary of shifting to EVs due to high upfront cost and lack of charging options. Among private users, 44% willing to buy an e2w but only 4% would buy e4w.

The state of Tamil Nadu has been a front runner in transitioning its automotive sector towards e-mobility. It was among the first few states to announce an EV policy in 2019, which served it well as today, 35% of all investments in the e-mobility sector in India have happened in Tamil Nadu. The state now must focus on increasing EV penetration, especially for commercial fleets.

In support of this, we undertook a consumer perception survey on the opportunities and barriers to adoption of EVs across Tamil Nadu. It brought to light high satisfaction rates amongst existing users, but significant barriers to greater adoption, due to considerations of high cost and unavailability of adequate charging facilities even though the government has set lofty targets and is promoting uptake of EVs across the state. The survey findings were released at an event in Chennai in the presence of Mr. S. Krishnan, Additional Chief Secretary, Industries Department, Govt of Tamil Nadu, and followed by a discussion among experts representing the EV industry, think-tanks, and government departments including those working on transport policy.

The survey covered 1,366 respondents in total across commercial fleet owners of cabs, three and four wheeler cargo, and last mile delivery two and four wheeler vehicles, as well as private vehicle users in 3 cities - Chennai, Madurai and Coimbatore. Commercial fleet owners comprised 81 respondents with large fleet sizes, and private users comprised 1,285. Collectively, the 81 commercial respondents own a fleet size of more than 6,800 vehicles in 2, 3 and 4 wheelers. Of these, cabs were more than 4,000, and last mile delivery fleets were more than 1,400.

The findings reveal that overall, electric vehicles have high appeal among both types of users, indicating strong awareness about their cost and environmental benefits. However, for the commercial owners, barriers like high upfront cost, insufficient charging infrastructure, and low pick up of EVs are key reasons for lack of willingness to shift to EVs.

Fig 1 – Despite EVs being appealing among commercial users, they are wary of switching

Three quarters of all the cab owners and 3w cargo fleet owners, and eight out of ten 4w cargo fleet owners were wary of switching to EVs. However close to 60% of last mile delivery fleets showed willingness to switch. Among private users, while 44% were willing to buy an electric 2 wheeler, only 4% were looking to buy electric 4 wheelers. Among the 153 private users who already own an EV, eight in ten people strongly believe EVs are value for money, and 76% would definitely recommend buying an EV to their peers.

Fig 2 – Additional Chief Secretary, S. Krishnan, addressing the audience at the event

Mr. S. Krishnan, ACS, Industries Secretary, giving the keynote address at the event, said, “The early findings of this survey were shared with us during the policy revision consultations, and has helped us frame the new policy. The findings show that we have a lot more work to do on raising awareness about the policy among users. Carbon neutrality was the key element of the new policy, in which we have focused on demand side incentives for shared mobility vehicles, which will give higher social outcomes, and also incentivising the growth of charging infrastructure. Tamil Nadu is home to the largest commercial vehicle financing industry in India, and I encourage them to introduce attractive financing mechanisms that catalyse EV adoption by addressing the issue of high upfront cost.”

Aarti Khosla, Director, Climate Trends, “Understanding consumer mindset is necessary to design effective policies and programmes that encourage long term behaviour change and adoption of new technologies like electric vehicles. We are seeing EVs as a big hope for the future of clean cities. These survey findings highlight the need for continued policy support to address issues of high upfront cost and building sufficient charging infrastructure in focus cities. The revised TN state EV policy, released recently, addresses these concerns through greater focus on fleet electrification, demand side incentives for commercial segments and increased charging. Now, efforts should be made to socialise this policy,  ensure effective implementation, and simplify processes for consumers and industry players alike to avail policy benefits.”

The survey revealed that in Chennai and Madurai, 70% and 91% respondents (respectively) feel there is inadequate charging infrastructure in their city. In Coimbatore, 100% respondents said they had noticed charging infrastructure around their homes and offices.

Fig 3 – Awareness of charging infrastructure among private users in low

Speaking about the challenges faced by charge point operators in setting up charging, Mr. Karthikeyan Palanisamy, CEO, Zeon Charging, said, “A lesser known issue for charging point operators is the challenge of keeping our stations viable and profitable. As EV adoption increases, this issue will slowly resolve. However, in the interim, policy support should also focus on helping to keep charging stations operational till the market grows sufficiently. Capital subsidy is not enough.” 

Vidya Shankar, Head, Entoo shared his views on the challenges last mile delivery fleet owners face, “Bottlenecks in the supply chain of EVs that extend the time of receiving vehicles for use in our fleets, insufficient service network like mechanics, and the knowledge among commercial fleet owners of the technology of an electric vehicle - are key barriers to switch to electric. Manufacturers need to infuse confidence about the quality and safety of EVs among private and commercial users to encourage adoption.” 

That high up front cost is a primary barrier among commercial fleet owners, Mr. Sridharan P, Joint MD, Shriram Finance shed light on the role of banks and NBFCs in pushing for electrification. He said, “As financiers are convinced that the way to go is electric. It is an investment and risk that we are willing to undertake, and bear the early costs that may come with it. The enterprise in India is very dynamic, and we believe in the EV sector. We as financiers follow their conviction. While we discuss incentivising EVs, it might be worth considering disintencivising ICE vehicles through higher taxes as well.”

Among commercial users, only 5% of 3w cargo fleet owners, 15% cab owners, 17% 4w cargo owners and 29% LMD fleet owners were aware of any benefits in the Tamil Nadu state EV policy, indicating the need to socialise the policy.

Mr. P Thirupathy Mahalincam, Head of Operations, Fast Track cabs, said, We have received good support in the new EV policy but a lot of challenges continue to remain while making a transition. ICE is getting more expensive and that is an incentive for us to consider EVs. But we cannot register commercial EV four wheelers in Tamil Nadu and that is the biggest roadblock right now. Once that happens, we will begin the transition as we recognise the benefits of EVs. What remains is the range anxiety due to the limited charging stations and the need for a better parking infrastructure to accommodate EVs as they charge. In the next 10 years, we aim to convert 100% of our fleet to EVs.  

Responding to this, Mr. Anirudh Gulur, Consultant, Guidance Bureau, said, “This is a priority for the government as well. We have submitted a proposal to the transport department on opening commercial registrations for EVs. Soon, there should be guidelines in place for this.”

The survey also revealed little interest among commercial users to retrofit their fleets into electric or avail scrappage incentives against buying a new EV. There is a need to build awareness about the upcoming retrofitment technology and its potential in converting ICE vehicles to electric, particularly in the two and three wheeler fleets.

OTHER FINDINGS

Commercial fleet owners


Key appeals of an EV:
90% cab owners, 70% 3W cargo, 79% 4w cargo and 82% LMD fleet owners rated low running cost as the most appealing aspect of an EV. This was closely followed by low maintenance cost and environment friendly.


Key concerns of an EV:
85% cab operators consider insufficient vehicle range and and 80% consider insufficient charging network to be main barriers to EV adoption. Across 3W cargo (65%), 4W cargo (46%) and LMD fleets (41%), low pick and loading issues are the biggest barriers.


Scrappage incentives and retrofitment have low appeal:
No 3 or 4w cargo owner has interest in availing scrappage incentive against buying an EV. 30% LMDs and 20% cabs are interested in availing scrappage incentive against buying an EV

No cab or 4w cargo fleet owner wants to opt for retrofitting. 40% 3w cargo and 20% LMD fleet owners interested to opt for retrofitting.


Awareness around EV policy is low:
Only 5% 3w cargo fleet owners were aware of any benefits in the EV policy.

15% cabs, 17% 4w cargo and 29% LMD fleet owners were aware of any benefits in the EV policy.

Private Vehicle Users (1,285)


Key appeals of an EV among petrol and diesel vehicle users:
Low running cost and low maintenance cost were the top two appeals for all users.


Key concerns around EVs:
Safety of EVs was the top concern among all respondents, followed by issues during rainy season and batteries starting to lose performance with time. High initial cost fared as the lowest concerning point.


Policy awareness is low:
96% of respondents are not aware of the EV policy and its benefits. 100% and 98% respondents in Coimbatore and Madurai respectively were not aware of the EV policy.