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The electric vehicle (EV) space in India is heating up with companies spending big money to grab the attention of curious consumers. Bengaluru-based mobility startup Ather, which recently launched the new Ather 450X in the Indian electric two-wheeler segment, is eyeing the leadership position in the category.

In an exclusive interaction with Storyboard18, Nilay Chandra, VP - Scooter Business, Ather Energy, talks about its evolving marketing strategy, decoding the EV customer and solving the negative perception associated with the EV category.

How has your marketing strategy evolved over the past few months? What has been your initial learning in terms of what kind of marketing is working and what is not working so far?

Right now, we are in a full scaled up phase. Our brand is known to a lot more people, we have moved to a pan-India approach and gone mainstream by adopting TV and print in the last one year. We want Ather to be considered like any other scooter company that has been there for decades. This year, we have realised that we are leaders in the EV category and we need to be perceived that way by consumers. Hence, we have exposure in IPL even in regional markets where we have associated with Indian Super League (ISL), Tamil Nadu Cricket League. Sports is a means to reach our TG. Coincidentally, post-Covid a lot of sporting events have had high viewership of a core SEC A/B which is why it has become a vehicle of preference for us. Though our mainstream campaigns continue, sports adds a layer of salience and engagement for us. 

Which media platforms work the best when it comes to promoting EVs in India?

What really works for us is our community, influencer and auto industry engagements. We are able to engage with them in a manner which is very different from the category. Within paid mediums, video content has built a lot more traction for us in the last two years. Within that, regionalisation has given us way better results. Content which is made for the geography based on the locales of the geography and which is contextual is picking up traction. OTT, digital, TV and print as a mix has been extremely useful for us.

How is it different from conventional auto marketing and advertising?

Owing to the fact that electric vehicles (EV) is a new category the consumer’s expectations from it based on how they live their life today vis-à-vis the expectation from the existing brands is from the perception they have built over the years. Consumers expect that the brands coming from the EV category will speak the language of today and not build on the language of yesterday. These expectations are in terms of media channels, the kind of content being put out, how relevant it is and how exclusive it is.

Consumers also expect us to understand that they do not know everything about the EV category so education becomes way more important. There is a lot of education oriented marketing happening in this category some of which can be paid. For instance, our retailers have become the education creators to even address anxieties that consumers might have related to rain or reliability for instance. A leader brand needs to take care of all this.

<blockquote>At this stage, there’s no substitute to having good reliable products with an intent to be industry for a longer haul and not running after selling certain volumes.</blockquote>

Who is essentially an EV consumer? What makes them tick? Their desires, preferences and beliefs.

Gone are the days when people would look for EV scooters for low-cost option or low-speed option which doesn’t require registration. Every scooter buyer is an electric scooter customer who is futuristic, not settling for average products and has the willingness to try something new. Early EV adopters are more aware consumers, they have the ability to discern something knowledgeably that is new. We have seen consumers who are heavy riders and are willing to try superior features offered by EVs. People who want performance are looking at EVs seriously including motorcycle riders.

But there are many challenges facing brands. What are the key challenges in your view? 

My biggest challenge is I don’t have enough scooters to supply to our potential customers. There is momentum and demand but unfortunately because of the Covid-led disruptions, the war and the electronic equipment supply hurdles we have not been able to meet the demand of the scooters. While there were consumers willing to buy an EV the industry did not have enough stick to meet that demand. At this stage, the EV industry requires good reliable products. Consumers have a very high benchmark on reliability and trust for their automobile manufacturers. I think while we had a great journey on delivering reliable and consistent products I don’t think that is true about consumer’s perception about the category. 

We need people in the category who are as focussed on the quality, reliability and consistency That would be the second biggest enabler to getting way higher EV adoption. Awareness about charging infrastructure is another critical challenge.

When consumers want to adopt a category because the products are better, especially in a category where families are going to use it and deeply linked to their livelihood as it is related to the commute, I think reliability of a product becomes fundamental. 

Rather than pointing fingers at how things are blown up in the EV category which might be true, the industry needs to focus on measures to make reliable products. Once consumers see evident action being taken by all players then half of the problem will be solved and then we could do myth busting exercises. At this stage, there’s no substitute to having good reliable products with an intent to be industry for a longer haul and not running after selling certain volumes.

EVolve 2022: Industry needs to focus on measures to make reliable products: Ather’s Nilay Chandra

Note to readers: The last decade has witnessed significant advances in mobility and transport. New technologies and opportunities have brought a dramatic change to our societies. Planet and people-friendly transportation is more relevant than ever in the history of humankind, with everything from health to climate crises hitting us at warp speed. Storyboard18’s Month In This - EVolve 2022: Building an electric future, is an opportunity to bring to the forefront conversations around charging up marketing and brand building, to exchange and share new ideas, challenges and solutions in the field of clean transportation and mobility. Catch this Storyboard18 special on Moneycontrol, CNBC-TV18 and Forbes India. 

“Once you try an EV, it’s hard to go back to internal combustion,” says Arun Vinayak, founder of Exponent Energy, a Bengaluru-based maker of battery packs and battery management systems. Vinayak’s statement might seem biased, and can possibly invite the ire of many-a-petrolhead but is objectively hard to argue with. 

Electric vehicles deliver torque instantaneously, have far fewer components than an internal combustion vehicle, and therefore experience far less wear and tear. They’re silent and swift and capable of being constantly updated via easy-to-download software upgrades. They’re the future.

In the last two years alone, the EV segment has witnessed immense growth. The last financial quarter alone revealed a cumulative growth of 668% across two, three and four-wheeled electric vehicles (according to FADA data). Experts suggest that first adopters of EVs were drawn towards the technology for a multitude of reasons. According to Bertrand D’Souza, Editor-in-Chief of Overdrive, consumers do wish to contribute towards sustainability, although high costs of petrol and diesel are a major reason for the shift to EVs. “People also want to drive what few other people own” 

According to Hormazd Sorabjee, Editor-in-Chief of Autocar India however, the average EV consumer has always been buoyed by financial incentives as EVs, for the first time, present a viable alternative to the rising cost of petrol and diesel. Environmental considerations rarely, if ever, come into the picture. “95% are concerned about their wallets rather than saving the planet” 

Even though EV startup’s like Ather Energy began building an EV brand in 2013, with both its co-founders, fresh out of IIT, it wasn’t until four years ago that the technology became a viable mobility solution. “Back in 2014, it was more of an urban mobility toy,” says Vinayak who formerly served as the Chief Product Officer at Ather Energy. “Now when people are looking for a product that’s efficient, well built, well designed, EVs have made it to the choice list, across the price spectrum,” he adds. Sorabjee seconds that notion, citing low running costs and ease of use as the chief preference for early adopters. “EV adopters are ready to embrace the technology as the future”. 

In many ways, brands like Tesla were almost single-handedly responsible for putting EVs on the global map, by making them desirable. No longer was the technology limited to golf carts and milk floats. Instead Tesla proved that lithium-ion battery chemistry could be used to deliver explosive speed, wrapped-up in top-shelf luxury. Tesla may have done plenty to make the technology aspirational, but the price point it operated in, did little to make it accessible. And while global carmakers continue to struggle with the conundrum of the elusive low-cost EV, the challenge of making EVs accessible seems to have fallen upon Indian EV makers, offering a variety of two-wheeled mobility solutions to a populace besieged by crippling fuel prices. Unlike highly industrialised car markets like the US and Europe, India’s EV market has grown from the bottom up. By all accounts, when it comes to Indian consumers, utility trumps novelty. However, when it comes to purchasing decisions, it’s not all number crunching and utilitarian logic, as far as the Indian EV buyer is concerned. 

Srinivas Krishnan, Senior Vice President at Adfactors PR, says that the risk-taking ability of the Indian EV consumer is not to be overlooked. “I think the Indian consumer, yet again, is surprising OEMs, the government, policymakers and all other stakeholders in the mobility space.” According to Krishnan, there have been several missing links in the E-mobility space, despite which, consumers were willing to put their faith in relatively unknown technology. 

<blockquote>“We are still an emotional lot, we perceive risks and rewards differently as compared to many other consumer cohorts in other countries,”</blockquote> 

says Srinivas Krishnan, adding that brands which are mindful of this notion, and attempt to understand the Indian EV consumer’s willingness to experiment with promising technology, are the ones that go far. “The most successful companies in India are those that treat the Indian customer with respect and take the effort to understand their behaviour rather than try to unilaterally change it”. 

Of course that isn’t to say that Central and State Government sponsored rebates and incentives haven’t played a role. In fact there’s an evidently direct correlation between EV sales, particularly for e2W and the FAME II incentives and state EV policies that have been introduced in 2021. But it’s not as if the EV space has been entirely moribund in the states that are yet to offer incentives (Karnataka, for example) on par with the most pro-EV states (Gujarat, Maharashtra).

Barriers to entry 

Despite the steady growth that the EV segment is experiencing, it still occupies only three percent of the overall market share, with electric two-wheelers occupying the lion’s share of the sliver of the automotive pie. The reasons are manifold and are interconnected in a way that perpetuates the cycle of EV sparseness. “Personally, I am ready to switch to EVs. But there is currently no product in the segment I want,” says Krishnan, a motoring traditionalist who drives a diesel crossover on most days, with a penchant for classic and vintage automobiles. The lack of options in the EV space are one of the many issues keeping potential customers at bay, and, as a corollary, has caused many manufacturers to continuously hedge their bets when it comes to introducing EVs. This in turn keeps more customers from making the switch. 

For starters, no local manufacturer, be it Tata Motors or Maruti Suzuki, has managed to successfully take a crack at the affordable low-cost EV. Something of a chimera, given that lack of local lithium-ion cell manufacturing and battery costs make it impossible to sell EVs at an entry-level price point. Then there’s the fact that low-cost hatchbacks come with the sort of footprint which allows for a lower battery cell count, and therefore, lower range. It’s no accident that one of the first breakthrough EVs happened to be a large, luxury EV like the Tesla Model S. It allowed its makers a large canvas upon which a large battery could be placed, to justify the high costs. The fact that it made the product aspirational was an added benefit. 

<img src="https://images.storyboard18.com/storyboard18/t-684x1024.jpg" alt="" width="684" height="1024" class="alignnone size-large wp-image-1462" />

The absence of a strong public charging infrastructure, especially on highways, has played a major role in keeping EVs out of the driveways of single-car households. Why buy a car that limits mobility? “Mobility is about freedom. It’s about going where you want, when you want. And with the advent of cab aggregates, mobility has become a lot more flexible,” says Exponent Energy’s Arun Vinayak, adding that at present, electric mobility in the country does not offer that sort of untethered freedom. According to Sorabjee however, the reasons for limited adoption aren’t all that complicated and essentially come down to one thing: price. “EVs are too expensive. Range and charging infrastructure aren’t such an issue because people who are ready to buy an EV have sorted out their charging and range requirements before they sign the cheque.”

Ravin Mirchandani, Chairman of the ADOR Group, a manufacturer of AC and DC power solutions, concurs. 

<blockquote>“Cheaper will always win in India. And EVs will win when the total cost of ownership is at par with an ICE vehicle.”</blockquote>

But he sees the light at the end of the tunnel, that may be ending. “We will see an inflection point around 2025 in electric car ownership, because that’s when giga factories (for localised battery manufacturing) are scheduled to come online,” he adds. Mirchandani’s claimed inflection point, however, doesn’t come with a quantifiable number. And the only number that has come out of market research, isn’t particularly encouraging, pointing at a highly optimistic 30 percent market share by 2030. In reality, it’s likely to be somewhere between 20-25 percent. If everything goes according to plan. 

How brands are approaching the matter 

Even though the EV story in India has just begun, consumer focus and concerns appear to have gone through a shift, especially when it comes to electric two-wheelers, a lot of which gained notoriety over the last six months, for catching fire, seemingly spontaneously. 

Ather Energy, which has developed a reputation for making reliable, robust products, chose to highlight its battery’s resilience as the USP of its latest offering, the Gen 3 450X, instead of range and speed. Sure, range went up with the Gen 3 update, as did battery size, but those weren’t the elements that made it to Ather’s latest ad campaign. The TVC shows the brand’s head of Battery development sitting atop an oven containing Ather’s own battery pack, while eating ice cream. The word “battery” is then mentioned several times in the 1 minute long advertisement, with no mention of design, range or any of the scooter’s external attributes, signifying that battery safety is now front and centre, the main focus for e2W consumers. 

But concerns around battery safety aren’t something manufacturers can quell alone. “There will always be a reason not to adopt certain technologies,” says Krishnan, advocating that it will take concerted efforts from all stakeholders to accelerate adoption of zero emission vehicles. Not doing anything is no longer an option.” Krishnan, a PR pro sees a silver lining in the clouds of smoke emanating from burning batteries. “EV fires are a crisis that needs to be turned into an opportunity. By bringing awareness and getting the government to pay attention to this issue and regulate it. It’s the only way to separate the wheat from the chaff.” 

Vinayak is of a similar view when it comes to the need to differentiate between EV start-ups. “In India, I think we have three kinds of OEMs. First you have legacy OEMs who have ventured into EV making and they understand the need for quality and trust. Then there are start-ups which are building a serious product from the ground-up. I think Ather has done a very good job of establishing customer trust. Then you have the traders, who essentially repackage imported components and essentially just wish to make a sale and not design or create anything special. That one portion of the industry doesn’t do justice to what EV segment could be”. 

According to Bertrand D’Souza, “Brands fixate on performance and range instead of sustainability, probably because the entire cycle isn’t sustainable or eco-friendly yet” adding that “manufacturers don’t talk enough about how EVs reduce dependency on fossil fuels or if their vehicles are made from recyclable materials. For early adopters, these are critical matters” 

EV brands have clearly incorporated consumer anxieties into their marketing rhetoric, but according to Sorabjee, they’re yet to highlight the other obvious benefit of owning an EV: they’re just much easier to use and own. “EV Brands have focussed on the obvious, so far, which is about how EVs benefit the environment and how cost effective they are (in the long run). The fact that they are much easier to own and drive than ICE vehicles hasn’t been highlighted enough. EVs really take the stress out of everyday driving,” says Sorabjee. 

According to Arun Vinayak, EVs can be marketed around a vast number of aspects from the humdrum to the sensational. “You can tell a story about efficiency via a scooter providing a cost advantage, or a story about how an EV can be faster than a sports car,” he says. Krishnan reaffirms that much of the sensationalising of EVs was done by Tesla alone. “Tesla single handedly revolutionised the image of EVs.”

D’Souza feels that range will continue to be a core area of focus for brands, regardless of the price of the EV, or the segment which they operate in. “The current effort is to make denser batteries with higher range. But this would not be necessary if there was an adequate charging network, which still does not exist, both in India and globally” He also predicts that range anxieties will be alleviated in the future, but it will take a major infrastructural overhaul. “Studies have shown that what is required is a grid spread 50km apart from each other to ensure seamless mobility.”

EVolve 2022: Decoding the Indian EV consumer

On Monday, esports and skill gaming app Mobile Premier League (MPL) laid off 100 people, which represents about 10 percent of its workforce, and said it is exiting the Indonesia market. MPL joins a slew of Indian startups like Unacademy, Vedantu, Trell, and Meesho among others who have had to lay off employees as they look to cut costs amid an expected funding slowdown in the country.

It seems that the onset of winter in the startup world is also freezing advertising and marketing budgets. This is in sharp contrast to 2021 where startups contributed around 11 percent to the overall AdEx which stood at around Rs 74,000 crore as per industry estimates.

An email sent to Ola and Meesho on their possible ad budget cuts remained unanswered. However, advertising executives say that they are feeling the heat with clients cutting budgets.

“There is a huge slowdown on the advertising spends by startups because of the VC funding drying, these companies don’t have the money to spend. We have already started witnessing the slowdown post Indian Premier League (IPL). Within the startup category, we are witnessing a 30-40 percent reduction in media spends,” a senior media buyer tells Storyboard18 on the condition of anonymity.

Startups were some of the top advertising spenders as they pumped money in the first five months of the year including in the IPL. For instance, IPL’s official broadcaster Star Sports had roped in 14 sponsors out of which eight were startups – Dream11, Byju’s being co-presenting sponsors; CRED, PhonePe, Swiggy Instamart and Meesho as associate sponsors. Disney+Hotstar onboarded 18 sponsors with 12 of them being startups.

“We are hoping that it would be a temporary phenomenon so how adex will be impacted would be dependent on how July to September and World Cup pans out. I would not judge the whole year basis this slowdown but in the short-term it has really gone down because June, July and August are also lean periods. So if it goes down now nobody is bothered but if it sustains then people will get worried,” the executive quoted above adds.

Spending judiciously

There is capital but it is being deployed a lot more judiciously as compared to last year when the capital was flying all over the place, say industry executives. There will be rationalisation and marketing budgets will see some axing.

The amount of budget cuts depends on the stage of the company as well as valuation raised in their last funding round, says Arun Iyer, founder and creative partner, Spring Marketing Capital. “Later stage (Series B) onwards the fund raise is going to be a little tough this year. Twelve to 18 months being a tough environment so everybody is going to be cautious in the way they spend,” he notes.

Apart from working with multiple startups, Iyer’s advertising agency also has a Venture Capitalist (VC) arm which invests in new age companies. He sees this winter as an opportunity as well.

“We are in conversation with our companies where we have invested and having conversation about how to plan the way forward, having conversation on spending money effectively. As far as the investing part, we will be investing in companies this year as well. We will be seeing valuations which are a lot more real which is a good thing,” he notes.

But some are defying the changing tide. Arjun Mohan, CEO - India, upGrad said that they have not cut down on marketing spends at upGrad because they have been strategic in our expense planning to generate maximum ROI.

"In fact, our marketing spends have increased by 130 percent in FY23 because we are focused on creating relatable and personalised edutainment content, to make upGrad a household name, by targeting the right learner base across geographies. Our latest campaigns address the specific needs of our consumers, while piquing their interest with the concept of LifeLongLearning as a means to eradicate skill redundancy. Our plan is to spend an equal amount on both traditional and digital mediums, as we expand our course portfolio and tap into newer audience segments across the country," he adds.

Finding the silver lining

Media industry executives also believe that startups did have a good run so far and it is too early to completely write them off.

“The startups have had a spectacular run and it is only in the last couple of months that things have been relatively slow. These situations are cyclic at best and with India’s strong economic fundamentals and long-term growth outlook, we expect to ride out any temporary blip,” asserts Anupriya Acharya, South Asia CEO, Publicis Groupe.

Unlike established brands and industries, startups cannot afford to stop investing in brand building and sales either.

“They need to be in the consumer’s mind as the preferred choice and all communications are skewed towards ROI, given that growth targets need to be met on an ongoing basis. We expect sectors such as e-commerce, fintech and payment apps and now the gaming apps to continue advertising in a big way,” Acharya concludes.

Ad spends dip as startups slash marketing budgets

OLA