The Real Cost of Owning an EV vs. a Fuel Car

The decision to switch over to an electric vehicle (EV) is beneficial for the environment, but is it cheaper compared to owning a petrol car in India?

This is especially true for the Indian market where, with the assumption of electricity and petrol price rates alongside car models, an EV will most likely provide economical benefits in the long run due to cutting down on expenses.

Furthermore, EVs are now becoming cheaper with government incentives, resulting in notable profit margins when purchased.

Comparing Initial Costs: EVs Vs Petrol Cars

Typically, EVs have much higher starting costs compared to petrol cars, specifically because of battery expenses. Now with the advanced development of EVs, their expenses are far more competitive.

As of today, the average price for a petrol vehicle like the Maruti Suzuki Swift is between Rs. 7-10 lakh, and its EV counterpart such as Tata Tiago costs around Rs8.7 lakh.

Although, high end EVs such as the Tata Nexon EV and MG ZS EV that cost between Rs. 15-25 lakh are still more expensive than higher grade petrol options, the easy access to financing and various incentives are improving affordability.

Government Benefits: Closing the Cost Gap

The government of India provides subsidies through the FAME-II scheme, which is the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles, which makes the EV price lower by ₹1.5 lakh for certain models.

Several other state governments provide further aid by removing road taxes along with registration fees for Electric Vehicles. For instance:

• Delhi: Incentives set at ₹1.5 lakh for EVs and elimination of road tax.
• Maharashtra: Subsidy set on selective models up to ₹2.5 Lakh.
• Tamil Nadu, Karnataka, and Telangana: Lowered road tax and registration fees for EVs.
• Bihar: Provides incentives up to ₹1.5 lakh, along with tax exemptions for EV buyers.

Once these factors ease into the estimates, the cost difference disparity presents itself positively for EVs when compared to petrol EVs.

Furthermore, the tax for EV’s are only 5% whereas petrol car owners are expected to pay 28%. This makes EV’s a more favorable purchase in the future.

Comparing the Costs of Charge and Fuel: Which one is More Affordable?

The biggest benefit of an electric vehicle is operating them at a cheaper cost. Fuel expenses in Petrol in India is around ₹100 for every litere and a vehicle with a mileage of 18 km/l will cost approximately ₹5.5 for every kilometer driven.

On the other hand EV’s cost much less.

Most EVs consume between 12 and 15 kWh of energy per hundred kilometers traveled. Considering that electricity costs in India hover between ₹6-8 per kWh, the overall expenditure incurred per kilometer on an EV is around ₹1-1.5 per kilometer, which is far lesser than that incurred on petrol cars.

For instance:

A petrol car running 1,000 kilometers a month at ₹5.5 per kilometer would spend around ₹5,500 a month on fuel.

An EV running the same distance at a cost of ₹1.5 per kilometer would end up spending roughly ₹1,500 a month on electricity. At a rate of ₹6 per kilometer, this equates to an annual fuel savings of ₹48,000.

While there are some public charging stations, many EV owners charge their cars at home. A single Level 1 charger (standard 230V socket) provides approximately 32km of range overnight, thus meeting most daily travel requirements. However, a level 2 home charger can fully charge the battery overnight. A level 2 fast 240V charger allows homeowners to install a charger for ₹30,000-50,000.

While this installation is expensive, many states and utility companies provide rebates which allows homeowners to drastically offset this price.

Public Charging: Cost Factors and Availability  

India is developing its EV (Electric Vehicle) charging network. The number of fast-charging stations in metro areas like New Delhi, Mumbai, Bangaluru, and Hyderabad is increaseing, and so is their pricing, which is between ₹15 and ₹25 per kWh. Although charging in public can cost more than charging at home, it is still less expensive than petrol. A few charging networks also provide subscription services that lower the per kWh price.

Maintenance Costs: Where EVs Come Out Ahead  

Compared to petrol vehicles, EVs have a lot fewer moving parts making them much cheaper to maintain and service. With no engine, there are also no oil replacements as EVs mechanically break down less, and with regenerative braking, there is reduced brake pad wear. Overall, EVs are around 50% cheaper to maintain.

Industry estimates suggest that:  

• The average servicing and maintenance cost of a petrol vehicle annually is around ₹10,000-15,000.
• The average annual service and repair cost of an EV is ₹5000-7000.
• In five years, an EV owner can save up to ₹50,000 just based on maintenance expenses over the period.

Resale Value: Working Progress  

One of the major uncertainties with EV’s is their resale value. While traditional petrol vehicles tend to depreciate less, the resale prices of EV’s are still uncertain owing to the fear of losing value due to battery replacement. Improvement in battery technology and more consumption of EV’s will most likely increase EV resale value in the next few years.

Total Cost of Ownership Between EV and Petrol Car Over 5 Years.

In case of a higher upfront cost, an EV saves over 1.4 lakh in running and upkeep expenses over five years.

When Does A Petrol Car Make More Sense?

While driving, a few factors justify the investment in a petrol vehicle as opposed to an electric one.

• Long distance driving: For long road trips, one requires thorough planning as the charging infrastructure is still being developed.
• Resale uncertainty: When selling a vehicle, petrol cars tend to offer more predictable resale value than their electric counterparts.
• Higher Initial Investment: If funds are tight, then a petrol vehicle is comparatively more accessible than its electric counterpart, even though it will result in lesser savings in the long term.

The Future: Will EVs Get Even Cheaper?

EV costs are expected to decrease over the next few years due to the increase in charging infrastructure, as well as battery prices declining further. This goal set by the Indian government should also accelerate the affordability and availability of EVs.

Is an Electric Vehicle a Worthwhile Investment for You?

For those focusing primarily on long-term savings, EVs tend to have a lower cost of ownership. As an EV charges into a charging station, there is a lot of money saved for fuel and maintenance costs.

Although there is a slightly higher cost up front, in time, purchasing an EV will enable a user to save somewhere in the vicinity of ₹1-1.5 lakh over a period of five years. Along with these advantages, government support, green benefits, and an expanding network of charging stations make EVs a leading option.

Before concluding, determine the subsidized EV’s possible mileage, available subsidy, and modality of charging. If you mainly commute throughout a city using your own electric vehicle and your residence allows for charging, then an EV is definitely the more economical option.

Stick to a fuel car if:

•  You take frequent long road trips
•  You don’t have charging options nearby
•  You plan to sell your car within 3-4 years

EVs may be more difficult to embrace at the start but may prove to be more cost effective later. Their viability hinges on the pricing of chargers, resale pricing, and batteries.

Switching to an Electric Vehicle (EV) is a viable environmental and economical choice in a metropolitan area where charging infrastructure is robust. On the other hand, traditional gas-fueled vehicles still have their conveniences and advantages.

Stay tuned for more articles. Till then – take care!