Going green and saving on long-term costs running an electric vehicle

Both two- and four-wheeler EVs are available at various price points to suit your budget; you can also expect a slew of new models a few months down the line

There is little doubt that recent cases of electric scooters having caught fire recently have slowed down the adoption of electric vehicles to some extent. In fact, Vinkesh Gulati, President, Federation of Automobile Dealers Associations, dwelt on the concerns about safety of these vehicles in a May 2022 report, in which he said, “While two-wheeler EV sales were growing rapidly, though on a low base, various fire incidents across almost all EV brands created a fear in the mind of the customer. This, coupled with supply chain issues, has decreased two-wheeler EV sales drastically from last month.”

However, when it comes to electric four-wheelers, demand has grown by 400 per cent year on year to outstrip supply. The demand for passenger vehicles in this space has grown by 11 per cent to reach 263,000 units, surpassing the May 2019 (pre-Covid) level of 236,000 units. Says Gulati, “Dealers are not being able to fulfil the demand due to supply side issues such as electronic chips, major supply chain disruptions due to the Russia-Ukraine war and lockdown in China due to Covid.” Stating that this had led to an increase in waiting period (ranging from three months to two years), Gulati added, “Healthy bookings and single-digit cancellations show that demand may stay put even when normal supply resumes in the months to come.”

So, is 2022 the year of electric cars? Automakers big and small are rushing to launch electric cars to lead the EV race in India. Around 25 upcoming electric vehicles –19 SUVs, 4 Hatchbacks, 6 Sedans and 1 Pickup Truck–are expected to be launched in India in 2022-2024. Plus you can expect electric cars from brands such as Maruti Suzuki, Hyundai India, Tata Motors, MG Motors and Nissan in the next two years across segments. Even luxury players such as Mercedes-Benz, BMW, Jaguar Land Rover and Volvo are stepping up EV launches in the next few months, pricing them between Rs 60 lakh and Rs 2 crore.

Another reason for the spurt in demand is the increased awareness and concern among customers about climate change. Says 32-year-old Noida resident Binita Biswas who bought a Tata Nexon for Rs 17 lakhs in April 2022, “We need to reduce emissions from traditional crude oil-based vehicles. As such, the world is left with little choice but to shift to a cleaner, more environmental-friendly alternative—electric vehicles.”

What’s trending

Consumers today have a wide range of two- and four-wheeler EVs at various price points to choose from. An e-two-wheeler can cost you under Rs 70,000 after central and state government subsidies, at the lower end of the band, and over Rs 1.2 lakh at the upper. Four-wheelers have four distinct segments – economy or budget (below Rs 10 lakh), mid-end (Rs 12- 20 lakh), premium (Rs 25– 40 lakh) and luxury (upwards of Rs 50 lakh). The prices are mainly determined by the capacity of the battery (in Kwh) which defines the range of the vehicle, brand and features. Broadly, the average purchase cost of an electric two-wheeler today is around Rs 0.8-1.2 lakh and that of electric four-wheeler is Rs 15-25 Lakh (not including the luxury segment).

Says Rajeev Singh, Partner and Automotive Leader, Deloitte India: “The Indian electric vehicle market was valued at $1,434 billion in 2021, and is expected to reach $15,397 billion by 2027.”

The e-four-wheeler market is dominated by Tata Motors (85.31 per cent market share) followed by MG (11.46 per cent), Mahindra (0.86 per cent), Hyundai (0.74 per cent) and Audi (0.41 per cent). The two-wheeler in FY22 was led by Hero Electric (28.23 per cent), and followed by Okinawa (20.08 per cent), Ampere (10.65 per cent), Ather (8.63 per cent), and PUR EV (6.42 per cent). According to the latest data from Deloitte, the EV market in India is dominated by E2W (electric two-wheelers) and is expected to remain the same in foreseeable future since the 2W market occupies about 80 per cent of the market by volume. E2W now represents about two per cent of the two-wheeler market and E4W is 0.5 per cent of the four-wheeler market in India.

EVs are high in acquisition cost and lower in maintenance cost. Says Singh of Deloitte: “The cost of charging and EV is 15-20 per cent that of fuel for an IC vehicle. With the fuel prices increasing rapidly, this delta is only getting larger. Since EVs also have fewer moving parts, their maintenance cost is 30-40 per cent lower than that of IC vehicles. But the replacement cost in EVs is higher as components such as battery and drive unit are expensive. Since EVs are more technology intensive, software updates can add to the service cost in future.”

Be mindful of certain things

While buying an EV, a consumer should look at some key parameters to select a product that is best suited for his or her needs.

Manu Kohli, an expert in EVs, says one must assess one’s daily use. A person with heavy usage (over 70–100 km a day) should opt for vehicles with bigger battery packs. These vehicles cost more. Most 4W (except for the budget category) today offer a range of over 200 km on a single charge, so for most consumers daily charging will not be required. However, for 2W, consumers who have a high daily commute should opt for products with higher battery packs.

Do not discount the after-sales support. Since EV is a relatively new segment, a user must do some research on the after-sales support and maintenance services offered by the brand. Therefore, it is always better to buy products from large brands that offer nationwide services.

Be careful about the batteries you buy. The recent fire accidents have led battery manufacturers to be more careful about safety norms. Companies are researching on how to make high-temperature batteries suited to Indian climate conditions and which can avoid thermal runway, a challenge the sector currently faces. Says Samrath Kochar, Founder & CEO Trontek, a leading li-ion battery pack manufacturer with 3MWh capacity: “Battery-run vehicles are safer than fossil-fuel driven ones. It requires automobile manufacturers to be extremely cautious and undertake rigorous cell-testing processes to ensure that only those cells are used that meet the highest norms and quality standards. At the same time, the end-customer also needs to be careful on how they maintain their EV, by following several dos and don’ts, like temperature while charging, battery storage, and changing the battery care tips with seasons.”

Look for charging infrastructure. All vehicles come with their own chargers. However, four-wheelers nay require a dedicated charging point at the place of residence. Some societies and a number of offices are providing charging infrastructure. The government and some private companies are developing charging infrastructure in large cities and along major highways. A 2W can be easily charged using a standard 3-pin plug at home/office and some 2Ws come with removable batteries which can be carried inside the house/office and charged in a way similar to mobile phones.

The Government recognises the lack of charging infrastructure in the nation and understands that it will act as a major enabler to provide further impetus to the adoption of electric vehicles. Says an official from NITI Aayog, “Challenges such as high cost of land acquisition and obtaining a power connection have been major impediments to the rapid installation of charging station. But the battery swapping policy is going to be a game changer for the EV story primarily for three reasons: cost effectiveness, as it decouples the cost of battery and the vehicle, space efficiency as you can charge more batteries at a swapping station than at a normal charging station and time efficiency as it hardly takes 2-3 minutes to swap a battery.”

He adds that battery swapping will provide the lowest down time, and help them maximise the km operations on a daily basis. Battery swapping will initially get introduced for e-2Ws and e-3Ws. Various startups in India have completed one million battery swaps and have plans to further augment their network across India.

Finally, Evs have already become a style statement of sorts. But owning one still has some practical technical hurdles. As someone said, “if we are to make significant strides in climate action through electric vehicles, then producing them as a class statement for the rich won’t do–they must be made affordable enough to be owned by the vast population of working classes.”

Table: Indicative price list of existing and upcoming electric cars in India

Credits: Market Research; list is not exhaustive