Currently, a limited number of EV four-wheelers are available in the market, most of which are premium models offered by the likes of Kia, Morris Garages (MG) Motors, Volvo and Hyundai priced between ₹20 lakh and ₹65 lakh. Some of the EV cars that are priced modestly include Tata Nexon priced between ₹15 lakh and ₹20 lakh, Tata Tigor between ₹12.5 lakh and ₹13.64, Tata Tiago starting at ₹8.49 lakh and Mahindra E-verito priced between ₹9.13 lakh and ₹9.46 lakh.
However, barring the high upfront cost, electric cars can prove to be more economical over their petrol counterparts over the long term. The running cost of EVs is only a fraction of fossil-fuel based vehicles. Besides, with petrol becoming expensive by the year, it makes all the more sense, financially, to switch to the former.
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To evaluate how long it takes to offset the cost of an electric car, Mint compared the cost of owning Tata Nexon (XZA plus) petrol and Nexon EV Prime (see graph). The two cars are manufactured by the same company and are similar in terms of product specifications.
Our calculations showed that the extra money spent on buying an EV will be recovered by the time the car has covered 75,000 km driving distance. At an average annual commute of 17,000 km (46km/day), it will take you roughly four and a half years to cover this milestone. By the sixth year, which is typically the average time period one owns the same car before switching to another one, you would have driven 100,000 km and saved ₹1.92 lakh in owning an EV over a petrol car (see graphic).
Compared to petrol cars, driving an electric one will save 85-90% on fuel costs and this saving adds up overtime to offset the high upfront purchase price of an EV. To put this saving in perspective, our example shows that a Tata Nexon owner will shell out ₹6.92 lakh in petrol over six years (at prevailing petrol price), while a Tata Nexon EV owner will spend a meagre ₹68,000 on charging cost over the same time period. The EV owner saves about ₹6.24 lakh in fuel costs alone.
Further, EVs carry lower servicing and maintenance costs as they have fewer moving parts compared to petrol cars, and its main component, the battery, is maintenance-free. We have not included the cost of replacing a battery in our calculation as most EV car manufacturers offer a warranty of 6-8 years and the industry claims that car batteries last for 10-12 years and do not need replacement before that. Currently, the cost of replacing a battery is ₹15,000-20,000 per Kwh (a mid-range car’s battery is 30-40 Kwh).
It should be noted that since the running cost of an EV is majorly responsible for cancelling out its high purchase, net saving is possible only when the car is driven regularly. For instance, in the same example of Tata Nexon and Nexon EV Prime, if the average daily commute is 15km, the ownership cost of an EV car will be higher by ₹2.27 lakh compared to petrol one in six years. It may take about 13 years to offset the purchase cost (see graphic), but that is roughly around the time the battery may also have to be replaced (costing about ₹6 lakh) or the car is put up for sale.
High insurance
Apart from the higher purchase price, insurance on EVs is also comparatively expensive by about 40%. “With the value of the car being higher, the landing cost of insurance for the customer is higher in case of EVs," said Das.
He added that currently the depreciation applied on EV cars is in the same range as of petrol/diesel cars although the value of the battery depreciates faster than the value of the engine. “In five years, the value of batteries in the market depreciates by almost 70% but the engine depreciation is in the range of 50%. Thus, the petrol or diesel engine vehicle will be valued higher than one that runs on a battery."
Premium of EV insurance increases only due to higher IDV (Insured’s Declared Value) of the vehicle and not because it offers any additional benefit.
EV insurance, like any motor policy, covers the vehicle against accidental damage, fire, natural calamities, riots and theft of the insured vehicle. “Any kind of loss to the EV battery against accidental and ‘Act of God’ perils is covered under the insurance policies, while electrical and mechanical failure are not covered," said Indraneel Chatterjee, co-founder, RenewBuy.
Charge and range
EVs can easily be charged with a 15 amps socket used in households for air conditioners and geysers. Most car companies install 15 amps charging point at the owner’s home free of cost. But, the charging time in this case is longer. It takes about 9-10 hours for 10- 90% charge. A car that has a range (the distance covered on a fully charged EV) of 210-20 km and is driven for an average 45 km daily will need to be charged twice a week when a 15 amps socket is used.
Alternatively, one can use a CCS (combined charging system) connector for rapid charging (60 minutes for 10-80% charge) at a fast-charging station. You can locate charging stations in your city on platforms like EV Plug, Charge-List and Tata Motors website, among others.
Those who live in apartments inside housing societies and don’t have personal parking space have to rely on common charging points installed in the society. Sameer Ranjan Jaiswal, CEO, Charzer, said the Residents welfare Association (RWA) typically gets the facility installed and recoups this cost from EV owners by charging a premium on their electricity bills. For societies that don’t have RWA, EV owners can collectively get the charging system installed from companies that provide the necessary infrastructure and a billing system, such as ACDC Electric, Zeon, ElectricPe etc. Billing system in this option is based on a pay-as-you-use method.
Those living in housing societies can install a charger in common parking lot by drawing the society’s power line, installing a submeter and a charger. This requires getting permission from the society association and respective DISCOM.
Whichever method you choose, it is advised that you discuss the charging infrastructure installation with the society association/RWA before purchasing the EV as there have been cases where the housing societies have disallowed it.
Separately, the viability of EV cars becomes debatable for inter-city travel because smaller cities and highways do not have proper charging infrastructure. If you are planning inter-city travel, it is advised that you plan the charging schedule ahead. Ensure that there are functional charging stations on your route and that the hotel or any lodging you will stay in has a 15 amps socket installed in the parking area.
(The story has been updated to include Tata Nexon (XZA plus) petrol variant for comparison with EV in place of the earlier Tata Nexon (XMA S) model.)
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