A Study of Consumer Perception and Purchase Intention of Electric Vehicles

Full text

European Journal of Scientific Research
ISSN 1450-216X / 1450-202X Vol. 149 No 4 July, 2018, pp. 362-368
http://www. europeanjournalofscientificresearch.com
A Study of Consumer Perception and Purchase
Intention of Electric Vehicles
Pretty Bhalla
Asst. Professor
Lovely Professional University, Jalandhar, India
E-mail: bhalla.pretty@gmail.com
Inass Salamah Ali
Asst. Professor, Dar Al-Hekma University
Jeddah, Saudi Arabia
E-mail: iali@dah.edu.sa
Afroze Nazneen
Asst. Professor, College of Business
University of Jeddah, Jeddah, Saudi Arabia
E-mail: anazneen@uj.edu.sa
Abstract
Contemporary environmental concerns are thrusting the manufacturing and sales of
Electric vehicles. Combination of Indian skilled and semiskilled technological base, a
platform of large customer base, and relatively cheaper production and labor cost, has
fascinated almost all global electric vehicle manufacturers and component suppliers,to start
operations from India — Bosch, AVL and Cummins. To study Commercial success and
purchase intention of electric vehicle by Indians, there is a need to study the factors
influencing the consumer acceptance of these vehicles. Various factors that influence the
purchase decision of car buyers are individual perception on dimensions like environmental
issues, cost, trust, technology advancement, infrastructure, and society acceptance. The
results shows that environmental concerns and consumer trust on technology are
antecedent factor for perception about Electric vehicle purchase and the factors which give
adoption blow back are cost, infrastructure, social acceptance. Thus to promote sales of
electric vehicle government has to play a leading role by creating environmental policy,
infrastructure andsubsidized cost of vehicle or lower the bank rate of interest rate.
1. Introduction
Contemporary environmental concerns are thrusting the manufacturing and sales of Electric vehicles.
Year2018 have revolutionized the Indian manufacturer’sconception towards Electric Vehicle as best
alternatives to the fuel cars (conventional diesel/petrol combustion engine). For example the Nissan
Motors are developing 20 new models of EV and various Indian domestic players like Tata Motors,
Mahindra & Mahindra, TVS Motors and Bajaj Auto are trying to strongly hold the leverage of high
growth period of electric vehicles into theirstrategic competitive advantages in the market. This new
emerging market has led to various strategic alliances (Tata Motors with Fiat, M&M with Ford and
Renault, Bajaj Auto with Kawasaki, and TVS with Suzuki, Jaguar Land Rover by Tata Motors,
Ssangyong by M&M, and KTM by Bajaj Auto).
Combination of Indian skilled and semiskilled technological base, a platform of large customer
base, and relatively cheaper production and labor cost, has fascinated almost all global electric vehicle

363 Pretty Bhalla, Inass Salamah Ali and Afroze Nazneen
manufacturers and component suppliers ,to start operations from India — Bosch, AVL and Cummins
being a few examples, and the result would give thrust to infrastructural development.To study
Commercial success andpurchase intention of full electric vehicle by Indians, there is a need to study
the factors influencing the consumer acceptance of these vehicles.Various factors that influence the
purchase decision of car buyers are situation like regulatory environment, personal current
psychological factors, like attitude, perception, and society acceptance and consideration
levels.“Although some empirical studies of the consumer acceptance of hybrid vehicles have been
conducted, there is little research that considers the perception of an expected situation; in particular,
there has been little attention on the perception of full electric vehicles”.From Environmental
perspective, increase in high CO2-emissions and depletion of Fossil reserves , the roll out of Electric
vehicle can be perceived as a safety measure and future security(Neumann et al 2010).
Technology to be used in the upcoming EV is very mature and uptrend leading to high distance
coverage with efficiency and comfort. (Class, Winter et al 2010). The potential of electric mobility has
been studied in recentresearch from a technical (Werther, Frischknecht, labeye et al 2011) economic
(Kley et al 2011), logistic (Ehrler et al 2012), environmental (Sourkounis et al 2011) andinner-urban
(Schaumann, Solarat al 2013) point of view. However, research showed also that there isconsiderable
struggle for electric vehicles to create appropriate markets , at leastPublic Perception and Acceptance
of Electric Vehiclesin India. Changing is the trend from acceptance of fuel cars to EV requires a
massive propagation and trust building on the electric Vehicle segment. Still,however, there is a strong
negativity in acceptance of EV (Hiffman 2014).
The first parameter for strong push back in not accepting EV may be the experiences, comfort,
safety and reliability on traditional fuel cars. And second Indian concept of avoiding risk and
uncertainties for adoption of new technology .Thirdsocial reasons comes into being.
The study tries to correlate the EV purchasers’ psychological and situational factors, that effect
the purchase intension of consumers regarding electric vehicles, and find relationship existing between
them. The result draws a high influence from Government policies and promotions designed to
promote electric vehicles to reduce carbon emissions from transport.
Review Of Literature : History repeats itself” a famous quote has been proved right, by
powerful emergence of EV again in Indian transport industry. The use of electric vehicles was in life
before 1918 but it almost completely vanished with the development of gasoline-powered internal
combustion engine vehicles .These fuel led cars put the story of electric vehicle manufacturing on to a
sleep mode. But year 2017 has again revived the story, with the concept of making EV for longer
distance drives too and upliftment in a vehicle maintenance support system by Government.
Technology perception and adoptions has two aspects first is the attribute of technology and second is
of the adopter. In management perspective it can be explained through “innovation diffusion theory
(IDT) (Rogers, 1962) and subsequent extensions (such as the TOE framework, Tornatzky and
Fleischer, 1990).These relates to adoption of new technology based on usefulness (performance
expectancy), ease of use (effort expectancy)Social influence and facilitating conditions(Venkatesh and
Davis, 2000; Venkatesh et al., 2003)”. These parameters also play a very crucial role in adoption of
Electric Vehicles.
There has been a considerable increase in research on EVs and adoption the last few years. In a
recent study, Rezvani et al(2015) review work discusses the adoption of electric vehicles using various
theoretical framework, he explained consumer EV adoption behavior from various theoretical
perspectives like mix, planned and symbolic behavior. The maximum studies on EV adoption are
revolving around technological, individual, social parameters. Axsen et al(2012)did a quantitative
online survey based on lifestyle practice theory on 711 representative household in California, USA
and found that adoption of this new technology of EV is based on Pro-environmental lifestyle,
technology oriented lifestyle and Openness to change.
Burgessetal (2013) did a qualitative research on the adoption model of EV in 55 private drivers
of UK, and found that major factors which leads to purchase are Technical ,Cost , individual and
social factors.Caperollo and Kurani (2011) worked through rounded theory on 36 households in

A Study of Consumer Perception and Purchase Intention of Electric Vehicles 364
California, USA for 4-6 Weeks and found that the basic reason of non adoption of electric vehicles was
confusion in how battery works, not finding appropriate charging stations nearby, avoidance of
acceptance of new technology and driving habits.
Carley et al.(2013) did research on 2,302 individuals of USA with driving license and found
that the adoption and perception varies based on education, gender, age, experience, environmental
beliefs he explained that the various factors which steps down the purchase of EV as compared to
traditional vehicles are the cost parameters, infrastructure non availability and recharging time. His
study was based on Rational Choice Theory.Egbue and long (2012) did awareness survey on 481
students, staff and teachers of technical university regarding the acceptance level of new technology
and found that the factors like environmental awareness, technology awareness, experience with EV
and expectation about sustainability of EV plays a major role while buying an EV.
Graham –Roweet al (2012) based on his qualitative semi structured interview method studied
40 UKnon commercial and ICE drivers and found that the main force that relates purchasing intentions
are environmental parameters, cost of vehicle, cost of fuel, battery material electricity
source,performance, safety and the upgraded technology. The research done by Jensen et al (2013) on
369 Danish drivers explains that the acceptability of EV depend on hands on experience, purchase cost,
fuel cost , driving range and driving speed of the EV.
Kupra et al (2014) gave new dimension to elaborating the research from Political scenario by
studying 911 residents of USA. He found that the acceptance of EV would increase tremendously by
having a political belief,concern for energy independence and climate change. He suggested that tax
incentives can further enhance the sales.
Lane and Potter (2007) studied UK residents, consumers and potential consumers of Electric
Vehicle based on theory of planned behavior and value-belief-norm theory He found that performance,
ease of use, safety, reliability , energy efficiency of EV are the main contributors towards increased
sale of EV. There was no relevant study that backed the perception and adoption process in Indian
Consumers.
2. Framework in Consumer Perception and Adoption of EV
Adoption of any Innovation by consumers is based on awareness and perception regarding the
innovation. The literature review shows that the perception and adoption of Electric vehicles in various
parts of the world is studied by focusing on reducing Co emission (Pro Environmental lifestyle),
technology (Speed, distance, efficiency), cost (EV and Fuel), infrastructure (charging points) and social
acceptance. The Current Exploratory study focused on Perception and adoption of Electric Vehicle in
India by comparing the use, features, acceptance,and reliability of traditional cars with upcoming
Electric vehicles. It would help in Growth of technology and this is the most relevant topic for modern
India. This study enables to understand and explore the driving parameters that would lead to change in
adoption of electric vehicle in changing Indian ideologies.
3. Methodology
3.1 Sample and Procedure
An internet based survey was framed and conducted to collect sample for the study. The Purposive
random sampling techniques were used and sample comprised of owner of fuel cars and have the
intension of getting feedback was based on perception and adoption of upcoming electric vehicles.
Data was collected from service and business class people, who are almost every day use fuel cars.
Based on sample it was assumed that the entire population was well aware of technology used in fuel
cars and potential benefits of using electric cars.A total of 247 respondents filled the survey, with
varied demographics like location, education level, salary etc. out of which 14 were rejected because of

365 Pretty Bhalla, Inass Salamah Ali and Afroze Nazneen
incomplete information and the remaining 233 were used for the study. The sample had significantly
higher participation of males (73%) and the female number was only 27%. Respondents sample was
within age group of 24-47 years of age.
3.2 Tools Used
A survey questionnaire was developed comprising 35.questions which were responsible for identifying
various aspects of the research.Independent variable is the choice of adoption of electric vehicle and
dependent are the benefits or barriers to acceptance of EV. As both, benefits and barriers might be
based on environmental, cost, comfort, trust and technology, social acceptance, infrastructure
availability argumentations for both cars and electric cars.
We assume that these factors have direct influence on individual choice of vehicle. The first
section of questionnaire was related to demographics of respondents. Respondent’s views about
various parameters that effect purchase decision was analyzed in second section and finally in third
section respondents view about technology adoption was measured.
Analysis of the Data
The collected data were tabulated as per the research design to meet out the objectives of the study and
suitable statistical tools were used to analyze the data.
Environmental Concern
Environment is decorating day by day, and the crown for the same can be placed on head of
technological advancement. People now, are well aware of the harmful effect of environment
degradation and are put effort to safeguard the same. These concerns are even visible during purchase
decision of consumer products especially transport vehicles. Government of every country is also
concerned for the same aspect and is either prohibiting the use of vehicles responsible for higher
degree of pollution. In India, apart from driving license, pollution check is equally important. Kahn’s
[70] study indicated that “environmentalists are more likely to purchase hybridelectric vehicles than
non-environmentalists”. Jensen et al. [48] argued that “environmental concern hasa positive effect on
the preference for electric vehicles both before and after experiencing an electricvehicle”. Peters and
Dutschke [56] found that “having environmental advantages is a motivator foradopting electric
vehicles”. Bockarjova and Steg [35] stated that “people are more likely to adopt an electric vehicle
when they expect electric vehicles to decrease environmental risks”. Environmentalconcern is a basic
dimension which motivated manufactures to build electric vehicles, government to thrust its production
and consumer to increase its sale.
The current study reveals that correlation between environmental concerns and adoption of
electric vehicle is 0.53 means as the concern for the environment among fuel car users will increase the
adoption of electric vehicle will also increase.
∑(X - M
x
)(Y - M
y
) = 39.638
r = ∑((X - M
y
)(Y - M
x
)) / √((SS
x
)(SS
y
))
r = 39.638 / √((187.612)(28.862)) = 0.53
Low Cost of Vehicle
Purchase decision of vehicles always come under Rational Model Of purchase , which means that the
vehicle which provides Value For Money is always sort after. But in Regards to Electric Vehicle a very
interesting phenomenon is studied that the initial heavy cost of Electric Vehicle is responsible for
negative perception of Electric Vehicles and on contrary long run fuel saving and effectiveness leads to
a little positive thrust to perception and adoption. But theory of Time Value of Money actually creates
a negative perception in minds of consumers. This can lead to a new model, which can be purposed to
Government of India,” to safeguard the future of country , environmental need to be protected for
which government is fueling manufactures to make Electric Vehicles. But this cannot be successful ,

A Study of Consumer Perception and Purchase Intention of Electric Vehicles 366
until and unless consumers purchase it. To increase sale government must facilitate people with free or
subsidized loan, free insurance , free parking”This would generate a new vision for purchase intention.
Evidence of same can be taken from Norway-Global leader of Electric Vehicle Market Share.In2007,
EU ministers agreed to outline three 2020 goals: to cut carbon emissions by 20%, increase the share of
renewables inthe energy mix to 20% and improve energy savings by 20%. In line with these goals, the
European Commission supports aEurope-wide electro-mobility initiative, Green eMotion, worth €41.8
million, to exchange and develop know-how and facilitatethe market roll-out of electric vehicles in
Europe (European Commission, 2012). In addition to such supports, nationalgovernmental bodies
develop their own supportive policies for reducing the emissions and enhancing the adoption of
EVs.For example Sweden has a goal for 2030 to become fossil fuel independent.The current study
reveals that the correlation betweenlow cost and purchase intention is significant means if the cost of
the vehicle will go down the intention to purchase the decision will go up. Here it is the responsibility
of the electric vehicle producers to produce low cost vehicle by minimizing various variable costs and
also government must offer some subsidy to the customer and or provide bank loans at reduced interest
rate. These measures will definitely be useful in increasing the buying intention of potential customer,
∑(X - M
x
)(Y - M
y
) = 21.966
r = ∑((X - M
y
)(Y - M
x
)) / √((SS
x
)(SS
y
))
r = 21.966 / √((118.241)(28.862)) = 0.37
Comfort
Another important parameter which is sought after while buying a vehicle is comfort levels in using it.
This parameter is highly personalized, because the level of comfort and even perception of Comfort
varies from individual to individual .Research literature reviews that purchase of vehicle is dependent
upon comfort levels while using a vehicle. But as electric vehicles, are not well adopted in India, it
isbased on assumption that the vehicle would give a high level of comfort, this perception is driven
based on technology advancements. Many participants stated they would only consider purchasing an
electric vehicle once it has achieved certain levels of market penetration. And it was found that
comfort and intention to buy is positively correlated means if the driving and owning of the vehicle is
comfortable then the consumer may buy the electric vehicle. But here the government has to lay very
vital role and during the interaction with the potential electric vehicle buyers it was observed that they
are apprehensive in using electric vehicle because of lack of availability of electricity in various cities
and the cost of the lectricty is also very high.
∑(X - M
x
)(Y - M
y
) = 14.034
r = ∑((X - M
y
)(Y - M
x
)) / √((SS
x
)(SS
y
))
r = 14.034 / √((128.241)(28.862)) = 0.2307
Trust
To build trust on an engine or machine which is being used is very easy , but to imagine a product and
then put trust on it becomes very difficult. Similarly in Indian Market people have trust on technology
but trust parameter is lacking on electric vehicles. Trust is an important dimension , which had to made
stronger and stronger with passage of time, but is this trust is broken it would lead to fall in market
share and the organization would not be able to stand back . No relevant literature review is about trust
parameter on Electric vehicle is there. The current study reveals that there is no correlation between
Trust and perception of Electric Vehicles because the commercial use of electric vehicle is yet to come
and the consumers has to see various aspects of the vehciles and then will develop trust in them.
∑(X - M
x
)(Y - M
y
) = 12.155
r = ∑((X - M
y
)(Y - M
x
)) / √((SS
x
)(SS
y
))
r = 12.155 / √((121.888)(28.862)) = 0.297

367 Pretty Bhalla, Inass Salamah Ali and Afroze Nazneen
Technology
From the respondents feedback it is analyzed that people rely and have faith on technology but the
technology is move at a rate that it keeps on depleting soon, because of change at a very high pace
people are not ready or are confused to choose a technology. This can be concluded as people perceive
that changing technology is very good and beneficial but adoption of the same is very slow.
∑(X - M
x
)(Y - M
y
) = 18.353
r = ∑((X - M
y
)(Y - M
x
)) / √((SS
x
)(SS
y
))
r = 8.353 / √((239.06)(28.863)) = 0.4901
Infrastructure
Infrastructure is a basic requirement for any new vision to be converted into reality. Lack of
infrastructure makes an innovation die at its induction stage. Infrastructure required for creating
positive perception for electric vehicles and finally its adoption is roads, recharging stations, battery
exchange and service stations. Non availability rather poor conditions of existing infrastructure are
compelling consumers not to shell out their money into adoption of electric vehicle.
∑(X - M
x
)(Y - M
y
) = 10.207
r = ∑((X - M
y
)(Y - M
x
)) / √((SS
x
)(SS
y
))
r = 10.207 / √((123.241)(28.784)) = 0.1714
Social Acceptance
Society plays a very prominent role in purchase decisions, the product or services adopted by society
becomes an instant hit but if society does not accept it even survival becomes very difficult. Social
acceptance was taken from very divergent views based on demographics of respondents. Educated,
salaried respondent of urban areas considered it good option but high income urban respondent was
ready to buy only if it comes in high end model, public image was considered. Acceptability among
young respondents was comparatively higher but acceptability level among rural respondents is
comparatively lower. Respondents were of opinion that acceptability would be measured only if
vehicle start running on roads, but currently the acceptability is of the idea.
∑(X - M
x
)(Y - M
y
) = 9.897
r = ∑((X - M
y
)(Y - M
x
)) / √((SS
x
)(SS
y
))
r = 9.897 / √((163.31)(28.784)) = 0.1443
Table 1: Showing Rank Order of Preference in Buying Electric Vehicle
CONTENTS R score RANKING ORDER
Environment Concern 0.53 1
Cost of Vehicle 0.37 3
Comfort 0.23 5
Trust 0.29 4
Technology 0.49 2
Infrastructure 0.17 6
Social Acceptance 0.14 7
Conclusion
Based on the analysis, electric vehicle manufacturers and Government of India have to invest more on
social acceptance of the vehicle by creating more infrastructural facilities, putting more thrust on
technology, that can create trust in vehicles. The result clearly depicts that the population is well aware
of the environmental benefits. Now responsibility lies on shoulders of Government and manufacturers
that parallel to investing in manufacturing of vehicles, Consumer perception has to created by
providing the above said facilities so that dream can be converted to reality, people start adopting
electric vehicle and safeguard the future of India from several respiratory problems including

A Study of Consumer Perception and Purchase Intention of Electric Vehicles 368
asthma,lung cancer, Chest pain, Congestion, throat inflammation, Cardiovascular disease, Respiratory
disease.
References
[1] Neumann, I., Cocron, P., Franke, T., Krems, J.F.: Electric Vehicles as a Solution for
GreenDriving in the Future? A Field Study Examining the User Acceptance of Electric
Vehicles.In: Proceedings of European Conference on Human Centred Design for
IntelligentTransport Systems, pp. 445–453 (2010)
[2] Claas, B., Marker, S., Bickert, S., Linssen, J., Strunz, K.: Integration of Plug-In Hybrid
andElectric Vehicles: Experience from Germany. In: 2010 IEEE Power and Energy
SocietyGeneral Meeting, pp. 1–3. IEEE (2011)
[3] Winter, M., Kunze, M., Lex-Balducci, A.: Into a Future of Electromobility. GermanResearch
32, 20–24 (2010)
[4] Werther, B., Hoch, N.: E-Mobility as a Challenge for New ICT Solutions in the CarIndustry.
In: Bruni, R., Sassone, V. (eds.) TGC 2011. LNCS, vol. 7173, pp. 46–57.Springer, Heidelberg
(2012)
[5] Frischknecht, R., Flury, K.: Life Cycle Assessment of Electric Mobility: Answers
andChallenges. International Journal of Life Cycle Assessment 16, 691–695 (2011)
[6] Labeye, E., Adrian, J., Hugot, M., Regan, M.A., Brusque, C.: Daily Use of an ElectricVehicle:
Behavioural Changes and Potential for ITS Support. IET Intelligent TransportSystems 7, 210–
214 (2013)
[7] Kley, F., Lerch, C., Dallinger, D.: New Business Models for Electric Cars: A HolisticApproach.
Energy Policy 39, 3392–3403 (2011)
[8] Ehrler, V., Hebes, P.: Electromobility for City Logistics: The Solution to Urban
TransportCollapse? Procedia-Social and Behavioral Sciences 48, 786–795 (2012)
[9] Sourkounis, C., Ni, B., Broy, A.: Pollution of High Power Charging Electric Vehicles inUrban
Distribution Grids. In: 2011 7th International Conference-Workshop onCompatibility and
Power Electronics (CPE), pp. 34–39. IEEE (2011)
[10] Schaumann, H.: Development of a Concept for Inner-City Delivery & Supply
UtilisingElectromobility. In: Efficiency and Logistics, pp. 121–127. Springer, Berlin (2013)
[11] Von Radecki, A.: Transition Management Towards Urban Electro Mobility in the
StuttgartRegion. In: Evolutionary Paths Towards the Mobility Patterns of the Future, pp. 203–
223.Springer, Heidelberg (2014)
[12] Solar, A., Bolovinou, A., Heijenk, G., Lasgouttes, J.M., Giménez, R.: Mobility 2.0: Co-
Operative ITS Systems for Enhanced Personal Electromobility. In: 27th InternationalElectrical
Vehicle Symposium & Exhibition, EVS27 (2013)
[13] Hoffmann, C., Hinkeldein, D., Graff, A., Kramer, S.: What Do Potential Users ThinkAbout
Electric Mobility? In: Evolutionary Paths towards the Mobility Patterns of theFuture, pp. 85–
99. Springer, Heidelberg (2014)