Fossils vs Lithium — The New Age battle

The battle is on between fossil fuel and EV vehicles across the world, especially in India. The Indian government is pushing hard so that the country’s dependency on imported fuel can be reduced as it is a major expense category for the country.

But … but … but. Is EV worth it? Let us find out.

1. The cost — Since EVs are new to the market, they are extremely costly. I will take the Tata Tiago as a base for comparison. The petrol model of Tiago (top model) costs around Rs. 8.9 lakhs (ex-showroom). Add to that another Rs. 1 lakh for Road Tax and Insurance and it comes to around Rs. 10 lakhs. The EV of the same model costs around Rs. 14 lakhs.
2. Insurance — The insurance for EVs is higher since the battery is also covered. The battery makes up a major portion of the cost of the car. The initial insurance comes to around Rs. 40k for EVs compared to Rs. 20k for petrol variants. The renewals are also on the costlier side for EVs.
3. Maintenance — The maintenance comes to almost the same. The petrol variants incur around Rs. 4000 per year after all free services, while the EV comes in the range of Rs. 2000 — 5000 as there are fewer movable parts.
4. Fuel — Assuming you will ride the vehicle for 1,00,000 km on average. The petrol cost with an average mileage of 20 km per liter and an average petrol cost of Rs. 105 will lead to Rs. 5.25 lakhs of petrol fuel cost. If it comes to EVs, the cost to charge 250 km will cost around 14 units on average. So 100000 km will take around 5600 units. The average unit cost in India comes to around (assuming a base price of Rs. 6) Rs. Rs. 33600 only. Wow!
5. Resale — An average driver will ride around 100000 km within 5 years. In 5 years, the petrol model will depreciate to half its value. The resale value of EVs is still not clear since most of the users are reluctant to buy a used EV as of now. Since the major cost of the vehicle is the battery and the battery has a warranty for 8 years, the users will usually have to soon invest a huge amount after buying a used car while replacing the battery. Say they purchase a used EV after 5 years. Let us assume it depreciated to 50% of its original value i.e. 7 lakhs (could be less). After 3 years the battery will wear out and they will have to invest another 7 lakhs (assuming 50% is battery cost) which takes the total investment to almost 14 lakhs. Furthermore, petrol variants still go for 3rd and 4th resales but EVs are a little sceptical now. But there is hope that the cost of the battery will come down as technological advancements happen.
6. Environment — EVs produce no emissions. So you will be doing a good deed thereby protecting Mother Earth. On the other hand petrol emissions need yearly checkups and PUCC certificate renewals.
7. Charging — Refueling is a 10 mins job at a petrol station. However, EVs take a long time if you are charging at home (a couple of hours). But more fast charging stations are being set up by the government and things are picking up speed. The anxiety of whether the EV will drain off is also being handled with the government opening more and more charging stations on the highways.
8. Driving Experience — The EVs are very humble as there is little to no noise while driving giving you a next-gen driving experience. Although the engine performance is the same, EVs are said to deliver instant torque as compared to their petrol variants. Plus since EVs are gearless i.e. automatic transmission, they are easy to handle and anyone in your family can use it at ease.
9. Loans/Financing — Banks are keen on giving 100% financing for EVs currently.
10. Govt schemes — The government is on all in to drive the EV experience by giving solar panel subsidies and tax exemptions of loans (80EEB) for EVs currently.

Based on the above metrics, it looks like EVs are here to stay. But on the flip side with more and more people going into EVs, the petrol variants will get cheaper as they will likely go out of demand and will be up for cheaper resale values. So it could be a win-win for both types of customers. So if your budget doesn’t allow you to jump into an EV, you are doing fine for now. Sit tight and see how the journey unfolds.