How EVs Prove To Be More Affordable Than ICE In The Longer Run-The Math Behind
Entrepreneur's New Year’s Guide
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Anyone who is in the market looking for a new car has surely considered the possibility of going electric. Until a few years back, even the thought of having an electric vehicle (EV) was far-fetched. But increased awareness about climate change crisis along with improved EV technology and localization of suppliers has raised buyer's interest in electric vehicles. Also, considering the consumers will get the same speed, and at par features such as central locking, anti-theft alarm, app control, and mobile charger, the shift towards EVs seems more probable than before.
The Two-Wheeler Segment
With lower fuel and maintenance costs compared with conventional diesel or petrol two-wheeler vehicles, electric two-wheeler vehicles can save you money. For instance, if you drive 75,000 km in five years, then the approximate cost of running an EV is INR 60,000 whereas for internal combustion engine (ICE) products it would be INR 1,35,000. So, the total cost of ownership which includes fuel expenses, insurance, maintenance, repairs, as well as the losses incurred due to depreciation of the car, still the savings would be INR 50,000 in case of an EV.
On average, the running cost of EV is 80 paisa/km as compared to INR 1.8-2/km for ICE vehicles. Electricity is less costly, and the prices of electricity are generally more stable than the costs of diesel or petrol. Also, EVs which have detachable lithium-ion battery can be charged as per your convenience, hence no need to visit fuel stations.
One of the biggest factors holding people back from switching to electric vehicles is that the price of EVs is high due to the high cost of batteries. Many technology companies, start-ups, and manufacturers are working on reducing the cost of batteries. It is expected that in the next 3-5 years, the price of the battery will come down.
When it comes to maintenance, an electric two-wheeler vehicle motor is not as complicated as an ICE product, and EVs also have fewer moving parts. As a result, the motor and battery require less maintenance. There is no oil or oil filter to be changed regularly, fewer parts to wear out, and no engine to maintain.
Some drivers also find EVs more economical as the panel intimates the driver how they are driving and the energy being consumed by the battery, which means the drivers can go lightly on the accelerator and brakes, thereby extending the life of brakes and tires.
Why Do So Many People Believe That EVs Are Costly?
While, the production of EVs does cost more than the conventional ICE vehicles, but with the implementation of regulatory policies and R&D, things look favorable for EVs.
EVs are a powerful tool to improve air quality, overcome climate crisis, and overall save millions on health and environment, leading to a cleaner future.
These outcomes seem quite probable with continued market expansion, innovations in design and manufacturing, and lower battery costs. But that also includes introducing and sustaining encouraging policies, smart consumer incentives, rebates and investments in recharging infrastructure that make EVs more convenient.
Not only can EVs reduce emissions and contribute to climate change, but they will also help individuals, society and governments save millions of dollars, by reducing numerous health ailments.
To limit the damage from climate change, gradually the sale of EVs has to exceed sales of ICE vehicles, presuming a growth rate as fast as the adoption of smartphones in the last 10-15 years.
As the battery technology continues to evolve, more EVs are expected to hit the road. The Indian government has also chalked out various policies and incentives to promote electric vehicles and has set a target of 30 per cent EVs on the road by 2025. The good thing is, the momentum in the market now seems unstoppable, and the cross-point when an EV becomes cheaper than an ICE may come in 5 years or 10, but the automotive sector is all set for a dramatic shift.