Abstract:

Due to increased household wealth and fast urbanisation, the sale of fossil fuel cars has been steadily increasing, resulting in an alarming situation in terms of rising CO2 emissions in India.  This study contributes to the EV demand literature in the Indian context by (a) analysing the EV attributes and attitudinal factors of Indian car buyers that determine consumers' preferences for EVs, (b) estimating Indian consumers' willingness to pay (WTP) to buy EVs with improved attributes, and c) quantifying how the reference dependence affects the WTP estimates. For this investigation, a hybrid choice modelling approach was used. The results indicate that accounting for reference dependence provides more realistic WTP estimates than the standard utility estimation approach. The results suggest that Indian consumers are willing to pay an additional US$10–34 in the purchase price to reduce the fast charging time by 1 min, US$7–40 to add a kilometre to the driving range of EVs at 200 km, and US$104–692 to save US$1 per 100 km in operating cost. These estimates, as well as the effect of views on the likelihood of adopting EVs, provide information on EV design, marketing techniques, and pro-EV regulations that can help India embrace EVs more quickly. The equilibrium models could also assist policymakers in designing policies to increase the EV adoption by simulating the market-level impact of policies.