INDIA EV

EMERGING
OPPORTUNITIES MILESTONE PVT. LIMITED
 TABLE OF CONTENTS
BUSINESS PROBLEM VARIABLE
01 PROBLEM 02 STATEMENT 03 DESCRIPTION

TWO-WAY CHI SQUARE:

04 ANOVA
05 GOF

SPEARMAN
06 CHI SQUARE: 07
PEARSON
CORRELATION
08 CORRELATION
TOI

LOGISTIC
09 MULTIPLE LINEAR
REGRESSION
10 REGRESSION
BUSNIESS PROBLEM

Milestone Pvt. Ltd. Is an automobile company, with a wide range of vehicles.

They observed that prices of fuel are rising in India, due to the USA-Arabia oil
crisis. For this, they thought of manufacturing electric vehicles to decrease
environmental impacts and increase turnover. On the economic front, large-
scale adoption of electric vehicles is projected to help save $60 billion on oil
imports by 2030 – currently, 82% of India's oil demand is fulfilled by imports.
The government of India is providing various policies & schemes for this
cutting-edge designer technology. But the company is unsure whether the
Indian market would adapt & accept the changing trend quickly and positively.
 PROBLEM STATEMENT
Milestone collected data on various parameters to check the internal and external
factors for manufacturing EVs – like is there an adequate demand in the market, what
kind of model is gives better efficiency, what is a superior plug-type, is the CPI low, is
the disposable income high etc.
The ultimate motive is to know whether it would be profitable for them to invest in
manufacturing of EVs or not by analysing these variables.
 Pred_demand Oil_price Cpi Ex_Rate No_cs Lit_level
Consumer price Number of charging
Estimated Demand Price of fuel Exchange Rate Literacy level(%)
index(benchmark to stations ( in
for EV (Rs/Barrel)
measure of inflation.
thousands)

Sales Oil_vol Dis_inc Subsidies Infra_cost Efficiency

Subsidies(billions) Infrastruture Efficiency (Whkm)
Sales of EV Volume of Disposable income (per
fuel(number of person in INR thousand Cost(millions)
barrel in thousands. million.

VARIABLE DESCRIPTION

Battery_cost Power_trans Rapid_charge Sales Range Years

Cost of battery Type of engine & Whether it charges Actual Sales Kms run in a single Years
(thousands INR) transmission layout rapidly or not charge

Body_style
Model of the car Plug_type Top_speed Estimated_ Fast_charge
(sedan/Suv/MPV) Quarter
Type of plug for
charging EV’s
Top Speed (km/hr) demand
Projected demand
Quarter wise Fast charge (Km/hr)
 TWO-WAY ANOVA
Q. The automotive design department is in a dilemma. They are unsure whether variation in car model type
and charging plug type will have any significant impact on charging speed of the Electric Vehicles. To
determine the significance, use relevant statistical test and interpret the results.

Null Hypothesis: There is no significant impact of model type (factor A) on charging speed of EVs
H0 Null Hypothesis: There is no significant impact of plug type (factor B) on charging speed of EVs
Null Hypothesis: There is no significant impact of model type and plug type together (interaction) on
charging speed of EVs

Alternate Hypothesis: There is a significant impact of model type (factor A) on charging speed of EVs
H1 Alternate Hypothesis: There is a significant impact of plug type (factor B) on charging speed of EVs
Alternate Hypothesis: There is a significant impact of model type and plug type together (interaction)
on charging speed of EVs
 TWO-WAY ANOVA
Dataset - Variables Used:

Why Two-Way ANOVA

Two-way ANOVA is used when we have 2 factors and we want

to test for more than one means at a time. In this problem, we
want to check if there is any effect on charging speed because
of model type (9 levels) and plug type (4 levels).
 TWO-WAY ANOVA
Conclusion:

Output:
Reject H0: Reject Null Hypothesis
Variation in Body style has significant impact on charging speed.
While, plug type individually and plug type along with body style
do not have any significant impact on speed of charging.

Inference:

The automotive department will have to check

which body style has better charging speed and
based on that can take manufacturing decisions.
Also since type of plug causes no difference in
the speed of charging, they can opt for any type
of plug chargers based on their costs.
 CHI-SQUARE: GOODNESS OF FIT
Q. The management wants to understand whether the demand for electric cars across different models
is same or not

H0 Null Hypothesis: The demand for different models of EVs is normally distributed

H1 Alternate Hypothesis: The demand for different models of EVs is not normally distributed
 CHI-SQUARE: GOODNESS OF FIT
Dataset - Variables Used:

Why Chi-square GOF?

Model type is a categorical variable (nominal). Hence to perform

a hypothesis test on it, we have to go with non-parametric test.

Here want to understand whether the no: of cars produced

across different models is same or not. Thus we have to check if
the count of model type follows a normal distribution or not.
CHI-SQUARE: GOODNESS OF FIT
Conclusion:
Output:

Reject H0: Reject Null Hypothesis

Inference:

The demand for electric cars is not the same

across different models. Hence the company
should understand the customer preferences
before manufacturing any type of car.
 CHI-SQUARE: TEST OF INDEPENDENCE
Q. Based on prior experience in growth of EV industry, type of plug used and power transmission have been
affecting each other. The automotive design team wants to know whether this trend applies to the current
scenario or not. To confirm this, use appropriate statistical test and interpret the result so that management
can take decision with maximum assurance.

H0 Null Hypothesis: The variables Plug type and Power transmission are Independent

H1 Alternate Hypothesis: The variables Plug type and Power transmission are Dependent
 CHI-SQUARE: TEST OF INDEPENDENCE
Dataset - Variables Used:

Why Chi-Square : TOI?

Plug Type and Power transmission are categorical variables

(nominal). And we have to check if there is any relationship
between the two. Hence Chi-square: Test of Independence
would be the appropriate test.
CHI-SQUARE: TEST OF INDEPENDENCE

Conclusion:
Output:

Accept H0: Fail to Reject Null Hypothesis

Plug Type and Power Transmission are independent

Inference:

Based on our analysis, we find that there is a no

significant relationship between plug type and
power transmission. Therefore, automotive
design team should design the EVs after doing a
detailed analysis on other factors.
 PEARSON CORRELATION
Q. The CEO and other Board Members want to know how correlated the external factors- subsidies provided
by the government; Consumer Price Index; Oil price and disposable income are with the demand of the EVs.
Use suitable statistical test which will provide basic understanding and relation between the above factors
and interpret the results, so that they can take appropriate decisions.

H0 Null Hypothesis: There is no significant linear relationship between subsidies, CPI, Oil Price, Disposable
Income and actual demand.

H1 Alternate Hypothesis: There is significant linear relationship between subsidies, CPI, Oil Price, Disposable
Income and actual demand.
 PEARSON CORRELATION
Dataset - Variables Used:

Why Pearson Correlation?

Pearson correlation is used to check the correlation between

two or more numerical variables.
 PEARSON CORRELATION

Conclusion:
Output:

Accept H0: Fail to Reject Null Hypothesis

Inference:

Government Subsidies, CPI, Oil Price and

Disposable Income have weak correlation with
the demand of EVs in the country. These
factors do not statistically significantly impact
the actual demand. Thus, Milestone Ltd. does
not need to focus much on these parameters
to estimate the demand of their EVs.
 SPEARMAN CORRELATION
Q. Efficiency, range, maximum speed, cost of battery and speed of charging are some of the key parameters.
Milestone Ltd wants to know what relationship is there between these key factors, how these factors
influence each other and to what degree. To understand this, use appropriate statistical measure.

Null Hypothesis: There is no significant relationship between efficiency, range, top speed, battery cost &
H0
fast charge.

Alternate Hypothesis: There is significant relationship between efficiency, range, top speed, battery cost
H1
& fast charge
 SPEARMAN CORRELATION
Dataset - Variables Used:

Why Spearman’s Rank Correlation?

Spearman’s Rank correlation test helps in understanding

the correlation between two ordinal variables.

Interval and Ratio data are converted are sorted and

ranked to converted to ordinal data before applying
Spearman Correlation test.
 SPEARMAN CORRELATION

Output: Conclusion:

Reject H0: Reject Null Hypothesis

Inference:

Battery cost has negative correlation with

all the other variables. While variables
other than battery cost have positive
medium correlation among each other.
Thus, Milestone should focus on reducing
battery cost, improving- range, charging
speed, maximum speed and efficiency.
 MULTIPLE LINEAR REGRESSION
Q. Looking at the market conditions, economic factors, environmental concerns & purchasing pattern, there
are a lot of factors influencing demand and preferences for the EVs. To know the variables that have
significant impact on the demand predicted by Milestone Ltd, conduct the appropriate test and list down
the factors having major impact.

Null Hypothesis: There is no significant relationship between independent variables (battery cost,
H0 efficiency, charging speed) and dependent variable (estimated demand)
H0: β1 = β2 = β3 = β4 = β5 = β6 = β7 = β8 = β9 = 0

Alternate Hypothesis: There is significant relationship between independent variables (battery cost,
H1 efficiency, charging speed) and dependent variable (estimated demand)
H1: Not all β are zero

Model Equation: Estimated Demand = β0 + β1.Top Speed + β2.Range + β3.Efficiency + β4.Fast Charge + β5.Battery Cost
+ β6. Body Style + β7. Power_Trans + β8.Plug Type + β9.Rapid Charge + ε
 MULTIPLE LINEAR REGRESSION
Dataset - Variables Used:

Why Multiple Linear Regression?

MLR helps us to determine the relationship between one

dependent variable and multiple independent variables.

In this problem, we want to find out the factors that

influence the demand of EV cars. Hence by performing
MLR, we will get to know which are the significant factors
that affect demand.
 MULTIPLE LINEAR REGRESSION
Conclusion:
Output: Reject H0: Reject Null Hypothesis
• Unit change in Top Speed leads to 36% increase in demand
• Unit change in Range leads to 48% increase in demand
• Unit change in Battery cost leads to 15.7% decrease in demand

Inference:

Milestone Ltd. needs to focus on the maximum

speed, range and cost of battery while
manufacturing EVs. Estimated demand directly
depends on maximum speed and range while it
has an inverse relationship with cost of battery.
Based on this the management can produce EVs
as per consumer preference thus meeting the
demand.

Multiple Regression Equation: Estimated Demand = 196.92 + (0.36).Top Speed + (0.48).Range - (0.157).Battery Cost
 LOGISTIC REGRESSION
Q. There was a debate within the mechanical department whether maximum speed, range, speed of
charging, cost of battery and efficiency have significant impact on the type of power transmission. To resolve
their concern, run a statistical test to find out the level of significance.

Null Hypothesis: There is no significant relationship between independent variables (Maximum speed,
H0 Range, Fast charge, Battery cost and efficiency) and dependent variable (type of power transmission)
H0: β1 = β2 = β3 = β4 = β5 = β6 = β7 = β8 = β9 = 0

Alternate Hypothesis: There is a significant relationship between independent variables (Maximum speed,
H1 Range, Fast charge, Battery cost and efficiency) and dependent variable (type of power transmission)
H1: Not all βi are zero
 LOGISTIC REGRESSION
Dataset - Variables Used:

Why Logistic Regression?

Logistic regression is used for classification. The dependent

variable will be a categorical variable.

In this problem, Type of Power Transmission is a categorical

variable with 2 classes (0:AWD, 1: RWD). We are supposed
to find out if the variables Top speed, Range, Battery cost,
efficiency and fast charge helps in determining the power
transmission type.
 LOGISTIC REGRESSION
Output: Conclusion:

Accept H0: Fail to Reject Null Hypothesis

Inference:

Cost of battery, speed of charging, maximum

speed, efficiency and range has no
relationship with the type of power
transmission. After a further analysis, the
engineers might use any power transmission
that they can get at a cheaper rate.
Vinayak Simmi Adarsh Aayushi Tushar

B071 B057 B002 B001 B065