Electric mobility is a nascent segment with a market share in the low single digits in the overall auto industry. Consumers who’re leading the adoption of electric vehicles (EV) are doing so for very different reasons than their predecessors. Leaders in the EV space are steadily strengthening their value proposition and getting their marketing strategy right to propel the growth of the sector.
At the DigiPlus Fest 2023, organised by ETBrandEquity, Naveen Munjal, managing director, Hero Electric Vehicle spoke about building an EV brand with a strong focus on serving the price conscious two-wheeler segment.
While electric mobility has been a buzzword for some time, the way consumers perceive and purchase different EV products differs vastly depending on the category. The two-wheeler commuter segment has emerged as the largest EV market due to the attractive price points and promise of zero emissions.
Munjal stated, “Price plays a vital role in making EV products attractive to consumers and we’ve observed that even the smallest increase in price leads to a market decline.” The challenge hence is to drive mass acceptance of EV products.
This price sensitive behaviour also extends to the 4-wheeler segment where 81% of vehicles sold in the category were in the range of Rs 10 lakhs.
Another growth driver of the EV segment will be the infrastructure roadmap. The industry has received a huge tailwind from the central and state government as policies fostering the growth of the electric mobility ecosystem have been put in place.
While selling products via digital channels is becoming increasingly common, Munjal observed that the auto sector was reluctant to embrace digital as a direct-to-consumer channel until the pandemic struck. “There was resistance from dealer network to sell cars online but that changed post pandemic. Now, we’re upskilling our dealers with digital know-how, so they can converse with customers through video call and close a sale,” he added.
The digital conversations that the brand had with customers helped it decode the consumer perception with regards to the EV category and products. “The consumer told us that they’ve never tried a EV product before and so they need the touch-and-feel experience to be able to make the leap of faith,” noted Munjal. Thus, the brand conceived a phygital strategy to sell its EV products.
To inspire further confidence in the consumer, the brand went the extra mile and instituted a 100% return policy for the Hero Scooter within three days of purchase. Munjal claims, “This was a risky move but we saw that the returns were minuscule. Customers were more likely to upgrade or downgrade as the product didn’t quite fit their preferences in terms of power or utility.”
A strong reason why many consumers opt for EV products is to reduce their carbon footprint. Hero Electric started to offer free helmets to their customers which were made using recycled materials. There was such a demand for the ‘E-helmets’ that eventually the brand started charging for them, exclaimed Munjal. “People want to play a role in saving the environment and they want to stand out. Our products enable them to do just that,” he remarked.
Munjal believes that consumers must believe that EVs will be more economical in the long run. “The initial purchase price for EVs is higher, however, battery swapping technology will transform batteries from a capital expenditure into an operating expense for EV businesses, said Munjal. Eventually, the cost to the consumer will reduce, as they will only pay for energy, similar to regular automobiles.
“Telematics is also going to play an important role,” highlighted Munjal. “Companies that have nothing to do with battery technology will look at the driver’s usage data and be able to provide services such as a warranty extension or insurance policy,” he explained. ,
There are many trends that are shaping the future of the EV industry, however, Munjal posits that India has the potential to leapfrog other countries in EV adoption with the combination of technology and policy implementation.
