With industry giants like Ola and Tesla entering the Indian automobile market, the hype around electric vehicles in India has been reinvigorated over the past year. EVs have also emerged as a major talking point in the run up to the 26th Conference of Parties (UN COP26) meeting in Glasgow, scheduled for November this year, where green transitions are expected to be shaped and fostered.
Incidentally, the recent media spotlight on EVs has come hot on the heels of rising petrol and diesel prices in the country— a stark reflection of the economic case of transition to cleaner mobility running on alternative fuels.
However, despite this hype, people are still reluctant to adopt e-mobility solutions at scale. One of the major reasons is a significantly higher upfront cost of EVs over conventional Internal Combustion Engine (ICE) vehicles. Another factor is the still sparse ecosystem needed to facilitate confidence in consumers, particularly around charging station networks, and accessible and affordable repair and maintenance. Also mixed in are macro-economic concerns around the readiness of Indian consumers. A low average in terms of purchasing power restricts the adoption curve of new technologies such as electric vehicles.
While addressing issues that hinder the better adoption necessitates a case-by-case and segment-wise approach, there is also the low-hanging fruit of making EVs more desirable at their existing prices.
In this context, there are insightful lessons, both positive and negative, which one can draw from the Apple’s strategy of its landmark product, the iPhone. Both of these products bank on a certain niche attached to them, the brand value and sleek design in the case of Apple and environmental benefits in case of EVs. While the two are comparable in terms of price deviations from the industry average, iPhones fly off store shelves whereas EVs are still way behind in terms of consumer’s receptiveness.
There are several things at play which can be adapted as lessons by EV manufacturers.
Apple has a well-deserved reputation for reliability and smoothness in function that, according to the market, justifies its price premiums. The ecosystem is the key to Apple’s success. When consumers buy an iPhone, they buy into the whole Apple ecosystem that embraces and works with that. With features like ‘Continuity’, ‘Handoff’, ‘AirDrop’, ‘AirPlay’, ‘AirPrint’ – Apple aims to attract people to buy products to create an ecosystem of devices.
The after service of apple products attracts the consumers into buying its products. Apple, arguably, beats the competition when it comes to dealing with problems encountered with its products. Through ‘AppleCare’, claiming the warranty and insurance becomes absolutely seamless. Additionally the company has also invested in creating a massive support portal, effectively providing a platform to connect with other Apple users.
Additionally, another perk of apple products is the trade-in’ service with good resale value for apple products. ‘Apple Trade-In’ makes it easy to exchange any eligible smartphone for instant credit towards a new iPhone. Thus, from purchasing it to giving it up, Apple has everything figured out for its users.
Apple’s phenomenal success in carving out a deep niche in the telecommunication market holds interesting parallels in the auto-sector for EVs to capitalise.
The success of Apple products shows ways to increase the penetration of EVs by diverting the focus from the upfront cost and looking upon other factors. Two major things that we could learn from iPhones are ecosystem development and reliability. Developing an enabling ecosystem right from registry to resale of a vehicle will boost consumers’ confidence regarding EVs.
Long term warranty by Original Equipment Manufacturers (OEMs), specialised EV loans, EVs on lease and other innovative schemes like salary sacrifice schemes for employees could also push EV adoption among specific consumer categories. This would involve assessing commuting needs and patterns of target groups and determining suitable business models for successful demand-based integration of EVs.
For reliable functionality, the availability of charging stations and service centres is a major infrastructural concern. A dense web of charging stations, enough to create visibility, and avoid dead mileage is necessary. Technologies like GPS-enabled tracking, real-time monitoring of waiting time on charging stations and remote booking of slots can further enhance customer experience, affinity, and confidence towards EVs.
Training local mechanics to provide primary service for EVs might boost the consumers’ confidence of possessing an EV. Priority lanes and priority parking options for EVs could optimise vehicle usage, and might attract the ‘time is money’ segment of consumers.
The EV market is in development and is still in its early adoption phase. With limited options available currently, and technological development speeding up, consumers intend to wait for a better model of vehicle. Providing an easy trade-in service and a guarantee regarding its resale value, like with Ather’s buyback program, could positively affect potential consumers into buying the vehicles. Simultaneously, boosting the used car market for EVs can increase choice and affordability.
An ecosystem approach from manufacturing to end-of-life and awareness of consumers regarding the ecosystem therefore is needed to justify the current premium price of EVs. And with an enabling ecosystem the decrease in its cost would be the required icing on the cake.
Now, the main unlearning for the Indian EV market from the Apple’s story is of designing an ecosystem which supports the products of only individual companies. This is because unlike iPhones, EVs’ ecosystem is not portable and has to be shared by multiple users. Further, given that transportation is a public necessity and not a luxury like high-end mobile phones, there is need to place checks and balances through policy or regulatory means that ensures healthy, inclusive and competitive growth of the EV ecosystem. It is in the public and consumer interest that sector’s growth does not become synonymous to monopolistic growth of one or two behemoths in the market.
Open access and collective utilisation of infrastructure needs to be the guiding principles of regulations governing a technology-heavy growth of the electric vehicles, which at the moment seem to be the future of mobility.
Views expressed in this post are personal.
