Factors Influencing Purchasing Behavior of Consumers

towards E-Vehicles:

Author: Saptarshi Ray/PGDMG9, MBA, Universal Business School, Karjat, Raigad,

Maharashtra, 410201. Email address: Saptarshi.ray@ubs.org.in
Kaustave Roy/PGDMBDI3, MBA, Universal Business School, Karjat, Raigad,
Maharashtra, 410201. Email address: Kaustave.roy@ubs.org.in
Saubhagya Bhowmick/PGDMBDI3, MBA, Universal Business School, Karjat,
Raigad, Maharashtra, 410201.
Email address: Saubhagya.bhowmick@ubs.org.in
Yogesh Patil/PGDMBDI3, MBA, Universal Business School, Karjat, Raigad,
Maharashtra, 410201. Email address: Yogesh.Patil@ubs.org.in
Corresponding Author: Dr. Ansari Sarwar Alam

Abstract:
This research project seeks to investigate the variables affecting consumers' purchasing
decisions for electric automobiles (EVs). EVs have drawn a lot of attention recently as the need
to reduce greenhouse gas emissions and move towards sustainable energy sources has grown.
However, the adoption of EVs by consumers has been slow due to various factors such as high
upfront costs, limited driving range, and inadequate charging infrastructure. Therefore, it is
crucial to identify the key factors that influence consumer purchasing behavior towards EVs. In
order to comprehend and forecast consumers' intention to purchase electric vehicles, the study
intends to operationalize and evaluate the extended Technological Acceptance Model (TAM)
with perceived risk and financial incentives policy based on the integrative approach of
"Beliefs-attitude-intention" (EVs). By employing structural equation modelling (SEM),
adoption intention for EVs is directly and indirectly influenced by the predictor variables of
attitude, perceived usefulness, and perceived ease of use, and perceived risk, with the
moderation of financial incentives policy. Furthermore, the study finds that consumer
awareness, knowledge, and education are also essential factors that influence EV adoption. In
addition to being applicable to the design and development of electric vehicles that better meet
consumer demands, the key factors influencing consumers' purchase of electric vehicles also
serve as a theoretical foundation for the popularisation of electric vehicles and serve as a guide
for consumers' decision-making. To draw customers and encourage the sustainable growth of
the auto industry, the government and relevant manufacturers should take into account
expanding the publicity of electric vehicles and introducing more alluring battery and charging
plans. Although the global economy and technological advancement have advanced human
civilization, they have also seriously harmed the planet's ecological ecosystem. As a result,
people are giving the environment and sustainable development significant thought. New
energy vehicles are one of the solutions to environmental issues.

Keywords:
Purchasing Behaviour, TAM, SEM, EVs, Energy Concern, Environmental
Concern, EV adoption.

INTRODUCTION:
The transport sector is being challenged by environmental and climate change parameters, with
60% of CO2 emissions caused by vehicle traffic in major cities. Researchers are increasingly
interested in the transition from diesel/gasoline-powered vehicles to electric vehicles (EVs) to
improve energy efficiency, satisfy consumer needs, and meet environmental challenges.
Approximately 90% of global EV sales take place in China, Europe, and the United States. It is
essential to conduct a comprehensive study of the key factors affecting consumers’ adoption of
electric vehicles. Transportation is a major obstacle to sustainable economies, as it is expected
to contribute significantly to air pollution and the greenhouse effect. Alternative fuel sources
such as electricity are becoming increasingly popular due to environmental concerns. Policies
are needed to tweak and improve vehicle technologies and infrastructural requirements, as well
as awareness and acceptance of alternative fuel. Costs and technical considerations can affect
customer acceptance of electric vehicles, and governments across the globe are considering
policies to implement green automobiles. Electric vehicles are seen as the future drivers of the
automobile market and an innovation that can address environmental concerns. India is the fifth
largest automobile market in the world and is expected to become the third largest by 2030.
Researchers have adapted the Technology Acceptance Model (TAM) to understand consumer
psyche towards adopting EVs, but it only considers positive or advantageous factors of
cognitive beliefs and overlooks users’ negative perceptions about loss or resistance. The
relationship of perceived risk with attitude formation has been limited in the literature of EV
preference, which may be a latent impediment in EV adoption or new technology vehicles
diffusion. Financial incentives and subsidy policy have been found to have a direct and positive
effect on EV usage behaviour. However, scant literature has examined this important external
stimulus measure as a moderator in promoting EV adoption diffusion in India. No study has
examined TAM and its extensions to understand and predict consumer intention to adopt
electric vehicles in the context of the Indian zero emission mobility market.

NEED FOR STUDY:

Increasing adoption of EVs: Understanding the factors that influence consumer behaviour
towards EVs can help automakers and policymakers design strategies to increase adoption of
these vehicles. By addressing consumer concerns and preferences, they can create marketing
campaigns and policies that encourage consumers to consider and purchase EVs.
Environmental benefits: Electric vehicles are an important part of the transition to a low-carbon
economy, and increased adoption of these vehicles can help reduce greenhouse gas emissions
and improve air quality. By studying the factors that influence consumer behavior towards EVs,
we can identify the barriers to adoption and develop strategies to overcome them.
Economic benefits: EVs can provide economic benefits such as reduced fuel costs and lower
maintenance expenses. Understanding the factors that influence consumer behavior towards
EVs can help policymakers and automakers develop incentives and programs to make EVs
more accessible and affordable to consumers.
Technological innovation: The adoption of EVs is driving technological innovation, such as
improvements in battery technology, charging infrastructure, and smart grid systems.
Understanding the factors that influence consumer behavior towards EVs can help identify
opportunities for further technological innovation and research.
Promoting sustainable transportation: EVs are a key technology for reducing greenhouse gas
emissions and promoting sustainable transportation. Understanding the factors that influence
consumer behavior can help policymakers and manufacturers develop effective strategies to
promote the adoption of EVs and reduce the environmental impact of transportation.
Market demand: As the automotive industry transitions to electric vehicles, understanding
consumer preferences and behavior is crucial for manufacturers to design and market EVs that
meet consumer needs and preferences. By understanding the factors that influence consumer
behavior, manufacturers can develop EVs that are more appealing to consumers and improve
their chances of success in the market.
Economic implications: The adoption of electric vehicles has significant economic implications,
both for the automotive industry and for society as a whole. Understanding the factors that
influence consumer behavior can help policymakers and industry leaders develop strategies to
promote the growth of the EV market and ensure that the economic benefits of EVs are
realized.

Overall, studying the factors that influence consumer behavior towards EVs can provide
valuable insights into the adoption of these vehicles and help promote the transition to a
sustainable and low-carbon economy.

RESEARCH OBJECTIVES:
This study aims to investigate the factors influencing consumers' purchase of electric vehicles
in order to provide a reference for the design and development of electric vehicles and offer
suggestions for companies regarding future consumer purchases. It reviews related literature,
establishes a theoretical framework, proposes statistical hypotheses, designs questionnaires,
conducts surveys, analyses questionnaires' reliability and conducts project analysis, establishes
a structural equation model, conducts confirmatory factor analysis, and analyses the
convergence validity and discriminant validity of the model.
Literature Review:
1) S.Silvana , C.Davide , L.Federico , F.Alberto (2022), stated in the research paper entitled
as “Electric vehicles’ consumer behaviours: Mapping the field and providing a
research agenda”,This literature review examines consumer behaviour in the electric car
market using the techniques of bibliometric and thematic analysis. It uncovers key networks
of cross-citation between journals and authors, crucial global research hubs, and five key
debates and theoretical bases for buying electric cars. The research broadens the notion of
planned behaviour and provides practitioners with a useful consumer identikit. The findings
offer a variety of useful research issues to fuel the scholarly discussion.

2) V.Meghna, V.Ashish & K.Mahim (2020) stated in the research paper entitled as, “Factors
Influencing the Adoption of Electric Vehicles in Bengaluru”, this study tries to
comprehend how people in India feel and perceive about electric cars (EVs). Based on the
innovation diffusion hypothesis, a questionnaire was created, and possible advantages and
barriers were identified using multiple answer analysis. To find significant relationships
between several factors influencing the decision to buy an EV, cross-tabulation was utilised.
Financial incentives and perceived environmental benefits are both identified as major
driving forces for EV adoption. As a result of this study, policymakers would be better able
to understand consumer preferences and develop policies that will promote and encourage
the adoption of EVs in India.

3) P.Vishal Singh , K. Ravi , K. Shiksha (2021) stated in the research paper entitled as,
“Modeling barriers to the adoption of electric vehicles: An Indian perspective”, The
purpose of this study is to pinpoint and analyse the connections between the obstacles
preventing the adoption of electric vehicles (EVs) in India. A literature review reveals
thirteen barriers to EV adoption, which are then confirmed by academic and industrial
experts. Models of them are developed using MICMAC and ISM. The study also studied
the relationship of the identified barriers and classed them as 'driving barriers' and
'dependent barriers'. The research findings would encourage EV producers in taking these
limitations into consideration during the EVs' design phase and assist legislators in
developing a sustainable energy and transportation policy.

4) J. Deepak, K. Vikrant , K. Rishi , S. Pankaj Kumar (2021) stated in the research paper
entitled as, “Consumer adoption intention for electric vehicles: Insights and evidence
from Indian sustainable transportation”, This study aims to operationalize and test the
extended 'Technology Acceptance Model' (TAM) with perceived risk and financial
incentives policy to understand and predict consumers' intention to adopt electric vehicles
(EVs). It also examines the mediating role of attitude towards EVs and the moderation of
financial incentives policy in the context of an emerging sustainable transportation market.
The findings reveal that adoption intention for EVs is directly and indirectly influenced by
the predictor variables of attitude, perceived usefulness, perceived ease of use, and
perceived risk. However, no mediating effect of attitude has been found between risk and
adoption intention. The discussion and implications offer deeper insights for policymakers
and marketers on promoting EVs in the future.
5) T. Jui-Che and Y. Chun (2019) stated in the research paper entitled as, “Key Factors
Influencing Consumers Purchase of Electric Vehicles”. The Theory of Planning Behavior
(TPB), Technology Accept Model (TAM) and Innovation diffusion theory (IDT) were used
to explore the factors influencing consumers' purchase of electric vehicles. Results showed
that the application of the key factor model to consumers' behavioral intention is acceptable,
with consumers' control over the resources required to purchase electric vehicles having the
highest influence. Factors such as intention, environmental awareness, acceptance of
technology products, and attitude towards behavior have the most influential factors
influencing behavioral intention. To popularize electric vehicles, the government and
relevant manufacturers need to consider increasing the publicity of affordable vehicles and
launching more attractive battery and charging schemes. Personal innovativeness has a
negative impact, as consumers don't prioritize electric vehicles and their interest in
traditional vehicles is almost equal to that of traditional vehicles.

6) S. Kumar and S. Naman (2020) stated in the research paper entitled as, “Using extended
theory of planned behaviour (TPB) to predict adoption intention of electric vehicles in
India”. This study uses an extended TPB model to predict the adoption intention of 326
customers towards the purchase of electric vehicles (EVs). The sample respondents have
been taken from 57 dealerships of different automobile companies. The empirical analysis
of the study shows that attitude, subjective norm, perceived behavioural control, moral
norm, and environmental concern have a positive relation with adoption intention of buyers.
The study discusses the implications for EVs adoption in India and provides suggestions for
future research.

7) B. Pretty, A. Inass Salamah, N. Afroze (2018) stated in the research paper entitled as, “A
Study of Consumer Perception and Purchase Intention of Electric Vehicles”. The
production and sales of electric vehicles in India are driven by environmental concerns, with
Indian skilled and semiskilled technological base, large customer base, and relatively
cheaper production and labour costs. To study the commercial success and purchase
intention of electric vehicles by Indians, there is a need to study the factors influencing
consumer acceptance of these vehicles. The results show that environmental concerns and
consumer trust on technology are important factors for perception about Electric vehicle
purchase. To promote sales of electricity, the Government of India must create
environmental policy, infrastructure and infrastructure and subsidized cost of vehicle or
lower the bank rate of interest rate. Additionally, the government must invest in social
acceptance of the vehicle by creating more infrastructural facilities and providing more
thrust on technology to create trust in vehicles.

8) L. Kenneth, M. Joeri Van, L. Philippe, M. Olivier, M. Cathy (2013) stated in the research
paper entitled as, “Consumer attitudes towards battery electric vehicles: a large-scale
survey”. This paper presents the results of a large-scale survey in Flanders (Belgium) on the
advantages and disadvantages of Battery Electric Vehicles (BEVs), the acceptable driving
range, the acceptable charging time, the acceptable maximum speed, the role of the
government in the introduction of BEVs, the preferred governmental tools to maximise
sales, and the consumers' Willingness to Pay (WTP). Knowledge has no impact on the level
of acceptance for the driving range, but consumers with more knowledge want a higher
maximum speed and faster charging durations.
9) J. Beatriz, M. Blanca, A. Roberto (2016) stated in the research paper entitled as, “Analysing
consumer attitudes towards electric vehicle purchasing intentions in Spain:
Technological limitations and vehicle confidence”. This essay seeks to ascertain the
degree to which certain factors are crucial in explaining Spanish consumers' propensity to
purchase an electric vehicle. It focuses on how consumers perceive several technical aspects
of electric vehicles, including charging times, cost, range, and driver ages. According to a
logistic regression analysis, consumers' propensity to purchase a new electric car decreases
as their opinion of the cost and charging times increases. The findings are helpful in
defining important components associated with the best industrial policy that aids
businesses in promoting electric vehicles. An examination of 1245 respondents' propensity
to purchase an electric vehicle utilising their perceptions of price, age, battery lifetime,
charge times, and range was done using logistic regression.

10) K. W. Lai, Yide Liu, Xinbo Sun , Hao Zhang, Weiwei Xu (2015) stated in the research
paper entitled as “Factors Influencing the Behavioural Intention towards Full Electric
Vehicles: An Empirical Study in Macau”. This study investigated the variables affecting
people's aspirations to adopt fully electric automobiles in Macau. It was found that
environmental issues and how environmental policies are perceived are antecedent variables
of how fully electric vehicles are perceived, which influences a person's behavioural
intention to buy a fully electric vehicle. The psychological influence of environmental
concern on four different types of perceptions is both direct and indirect, with the perception
of environmental policies and the perception of the financial benefits of fully electric
vehicles being favourably correlated. Kang and Park's findings show that public policy
directly influences how hydrogen fuel cell vehicles are perceived and indirectly influences
how widely they are accepted.

11) Z. Xiang, B. Xue, S. Jennifer (2018) stated in the research paper entitled as “Is subsidized
electric vehicles adoption sustainable: Consumers perceptions and motivation toward
incentive policies, environmental benefits, and risks”. This study explains the method
through which consumer perceptions and motivations affect their propensity to buy an EV.
It concludes that perceived risks, perceived environmental benefits, and perceived economic
benefits are all connected with one another and that regulatory focus has a significant
impact on both perceptions and TPB constructs. The results can assist managers in more
properly triggering consumers' purchasing intentions and policymakers in creating adoption
policies that are more effective. It also indicates that perceived environmental benefits are a
significant element that can support EV adoption in the post-subsidy age.

12) S. Debjani, H. Siddhartha, K. Sanjay, S. Sreejay (2022) stated in the research paper entitled
as “An empirical study on consumer motives and attitude towards adoption of electric
vehicles in India: Policy implications for stakeholders” This study investigated the
motives behind users' attitude formation, behavioural intention, and word of mouth towards
electric vehicles. It found that positive and social motives influence positive attitudes, while
negative motives discourage and negatively affect adoption. Stakeholders can shape the
motives through government policy and strategic action.

13) K. Rupesh, J. Ajay, D. Akhil, B. Deepak, D. Ashish (2020) stated in the research paper
entitled as “Addressing the challenges to electric vehicle adoption via sharing economy:
 an Indian perspective”. The study examines the challenges faced by India for electric
vehicle (EV) adoption by 2030. It looks into the measures taken by the Government of India
(GOI) to promote research and development, the role of sharing economy and public
utilities in the promotion of EV adoption, and the role of the shared format in EV
technology promotion. The focus group study identified key areas where EV stakeholders
need to focus, such as cost of the battery, price multiples and power grid challenge. The
government needs to take the lead role and intervene at various levels to promote EV-
adoption.

14) S. Vedant, S. Virendar, S. Vaibhav (2020) stated in the research paper entitled as “A review
and simple meta-analysis of factors influencing adoption of electric vehicles”. This
paper examines the factors influencing a consumer's intention to adopt an electric vehicle
(EV). 211 peer-reviewed research articles were selected to categorise influential factors into
four main types: demographic, situational, contextual, and psychological. The findings
show that socio-demographic and psychological factors have a positive impact in predicting
consumers' EV adoption, but contextual factors, including policymaking and charging
infrastructure, are the most significant in determining rate of EV adoption. Consumer
characteristics like age, gender and education are more significant in determining their
purchasing intention, but most of the research is based on the survey of early adopters and
individuals with less EV awareness. RA, SEM and FA were the most adopted data
methodologies for testing the validity and reliability of the factors affecting EV adoption,
and frameworks such as TPB, DOI and VBN were the dominating theories in EV research.

15) B.Prateek, K.Rajeev Ranjan, R.Alok, D.Subodh, G.Daniel J (2021) stated in the research
paper entitled as “Willingness to pay and attitudinal preferences of Indian consumers
for electric vehicles”. This study adds to the body of knowledge on EV demand in India by
analysing EV attributes and consumer attitudes. It also calculates Indian consumers'
willingness to pay (WTP) to purchase EVs with improved attributes, and how reference
dependence affects the WTP estimates. The findings suggest that Indian consumers are
willing to spend an additional US$10-34 for slower fast charging.

SECONDARY RESEARCH METHODOLOGY:

Secondary research is a common approach to gather data and information for understanding
consumer behavior towards electric vehicles. It involves reviewing existing literature,
reports, and studies that have been published by other researchers, scholars, and
organizations.
The present research work is based on systematic literature review whereby the researchers
have gone through Scopus index generals with keywords like Purchasing Behaviour, TAM,
SEM, EVs, Energy Concern, Environmental Concern, EV adoption.
Researchers have searched the paper regards to the keywords from the year 2015-
2022.The keywords have reflected only 45 papers which well meeting the objective of the
research work. Further the research articles were divided based on the keyword.

We have clearly articulate the specific research objective, such as understanding the factors
that influence consumer behavior towards electric vehicles. This will help guide the entire
research process and ensure that the research is focused and relevant.

We have identified and selected relevant sources from the secondary research. These
includes academic journals, industry reports, market research reports, government
publications, and other reliable sources. Use keywords related to electric vehicles, consumer
behavior, and relevant factors to search for relevant literature.

We have conducted a thorough review of the literature available on the topic. This involves
reading academic articles, reports, and other relevant publications to gain insights into the
existing research on the factors influencing consumer behavior towards electric vehicles.

We have assess the quality of the literature we have collected. Consider factors such as the
credibility and reputation of the authors, the rigor of the research methods used, the validity
of the findings, and the relevance of the research to your specific research objective.

We have extracted relevant data from the literature that is directly related to the factors
influencing consumer behavior towards electric vehicles. This may include quantitative data
such as statistical findings, qualitative data such as quotes or narratives, and conceptual
frameworks or theoretical models that explain consumer behavior.

We have Analyzed and synthesized the findings from the literature to identify common
patterns, trends, and insights related to the factors influencing consumer behavior towards
electric vehicles.

Based on the synthesized findings, we have drawn conclusions about the factors that
influence consumer behavior towards electric vehicles. Summarize the key findings and
provide a concise overview of the current state of knowledge on the topic.

Based on the conclusions we have drawn from the literature review, we provide
recommendations for future research or practical implications for industry practitioners,
policymakers, or other stakeholders. Identify any gaps in the existing research and suggest
areas for further investigation.
 CONCLUSION:
In conclusion, the factors that influence consumer behavior towards electric vehicles
(EVs) are complex and multifaceted. Environmental concerns, cost savings, technology
and innovation, availability and accessibility, and social influence are all important
factors that can impact consumer decision-making.

The growing concern for the environment and sustainability has made EVs a more
attractive option for consumers looking for greener alternatives to traditional gasoline-
powered vehicles. The lower fuel costs and reduced maintenance expenses associated
with EVs can also make them more appealing from a cost savings perspective.

Furthermore, the technological advancements in battery technology and the expansion of

charging infrastructure have helped alleviate concerns surrounding range anxiety, which
has made EVs more accessible and practical for everyday use. As a result, the availability
and accessibility of EVs have improved, making it more likely for consumers to consider
purchasing an EV as a viable transportation option.

The social influence of friends, family, and other trusted sources also plays a significant
role in consumer decision-making. Positive experiences and recommendations from
others can help sway consumers towards considering an EV as a viable option.

Moreover, understanding the factors that influence consumer behavior towards EVs is
essential for manufacturers and policymakers. By addressing these factors and promoting
the benefits of EVs, manufacturers and policymakers can encourage the adoption of this
technology and promote a cleaner, greener, and more sustainable future. As the
technology surrounding EVs continues to improve and evolve, it is likely that the factors
influencing consumer behavior towards EVs will continue to change and evolve as well

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