How long does it take to break even the upfront cost of an EV? | Mint – mint | CarTailz

There are currently a limited number of EV four-wheelers available on the market, most of which are premium models offered by companies such as Kia, Morris Garages (MG) Motors, Volvo and Hyundai, and are priced somewhere in between 20 lakhs and 65 lakhs. Some of the EV cars that are modestly priced include Tata Nexon, which is priced in between 15 lakh and 20 lakh, Tata Tigor in between 12.5 lakh and 13.64, Tata Tiago off 8.49 lakh and Mahindra E-verito priced in between 9.13 lakh and 9.46 lakhs.

Aside from the high initial costs, however, electric cars may prove to be more economical than their petrol counterparts in the long term. The cost of running electric vehicles is a fraction of that of fossil fuel vehicles. Plus, with gasoline getting more expensive every year, it makes more financial sense to switch to the former.

To assess how long it takes to offset the cost of an electric car, Mint compared the cost of owning the Tata Nexon and Nexon EV Prime (see chart). The two cars are manufactured by the same company and are similar in terms of product specifications.

Our calculations have shown that with an average annual commute of 17,000 km (46 km/day), it will take you approximately six years to recoup the cost of purchasing an electric vehicle.

Compared to petrol cars, driving an electric car saves 85-90% on fuel costs, and this saving adds up to overtime to offset the high purchase price of an electric vehicle. 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 the prevailing petrol price), while a Tata Nexon EV owner will spend meagerly 68,000 (ON WHAT) in the same period. The EV owner saves approx 6.24 lakh in fuel costs alone.

In addition, electric vehicles come with lower maintenance and servicing costs because they have fewer moving parts compared to gasoline cars and their main component, the battery, is maintenance-free. We have not included the cost of replacing a battery in our calculation as most electric vehicle manufacturers offer a 6-8 year warranty and the industry claims that car batteries last 10-12 years without needing to be replaced before then. Currently the cost of replacing a battery 15,000-20,000 per kWh (a mid-size car battery has 30-40 kWh).

At the end of the sixth year you have a net saving of approx 30,000 owned an EV (see chart).

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EVs do not enjoy road tax: it was enacted by the Department of Roads and Motorways last year to encourage EV adoption in the country. Government subsidies for electric cars are now largely over as they have been made available to early buyers.

Since the cost of running an EV is largely responsible for recouping its high purchase price, it is important to note that net savings are only possible if the car is driven regularly. For example, in the same Tata Nexon and Nexon EV Prime example, if the average annual commute is 10,000 km (roughly 27 km daily), the running costs of an electric car are many times higher 2.19 lakh compared to a petrol in six years. It may take around 10 years to recoup the initial cost (see chart), but that’s around the time the battery may also need to be replaced (cost around $100). 6 lakh) or the car will be put up for sale.

We did not consider resale value when determining total cost of ownership due to insufficient data on EV resale. However, due to the current high demand for ICE (internal combustion engine) vehicles alone, their resale value will be higher than electric vehicles, said Animesh Das, senior director, motor underwriting, ACKO.

High insurance

Apart from the higher purchase price, the insurance of electric vehicles is also comparatively expensive at around 40%. “Because the value of the car is higher, the landing cost of insurance for the customer is higher in the case of electric vehicles,” Das said.

He added that the depreciation on electric cars is currently in the same range as petrol/diesel cars, although the value of the battery is depreciating faster than the value of the engine. “In five years, the value of batteries in the market loses almost 70%, but the value of motors falls in the region of 50%. Thus, the petrol or diesel vehicle is valued higher than a battery-powered vehicle.”

The premium of EV insurance increases only because of the vehicle’s higher IDV (Insured’s Declared Value) and not because it provides an additional benefit.

EV insurance, like any automobile policy, covers the vehicle against accidental damage, fire, natural disasters, riots and theft of the insured vehicle. “Any type of EV battery loss due to accident and acts of God are covered by insurance policies, while electrical and mechanical failures are not,” said Indraneel Chatterjee, co-founder of RenewBuy.

charge and range

EVs can easily be charged using a 15 amp outlet, which is used in homes for air conditioning and water heaters. Most car companies will install a 15 amp charging station at the owner’s home for free. However, the loading time is longer in this case. It takes about 9-10 hours for 10-90% charge. A car that has a range (the distance traveled by a fully charged electric vehicle) of 210-20 km and is driven an average of 45 km per day will need to be charged twice a week if a 15 amp socket is used.

Alternatively, you can also use a CCS plug (Combined Charging System) for fast charging (60 minutes for 10-80% charge) at a fast charging station. You can find charging stations in your city on platforms such as EV Plug, Charge-List and the Tata Motors website, among others.

Anyone who lives in apartments within housing companies and does not have their own parking space is dependent on jointly installed charging points. Charzer CEO Sameer Ranjan Jaiswal said the Residents Welfare Association (RWA) typically installs the facility and reimburses those costs from EV owners by charging a premium on their electricity bill. For companies that do not have RWA, EV owners can have the charging system installed jointly by companies that provide the necessary infrastructure and billing system, such as B. ACDC Electric, Zeon, ElectricPe, etc. The billing system in this option is based on a pay-as-you-use method.

Those living in housing associations can install a charger in a shared parking lot by pulling the association’s power line, installing a sub-meter, and a charger. This requires the approval of the society association and the respective DISCOM.

Regardless of which method you choose, it is recommended to discuss the installation of the charging infrastructure with the Association of Society/RWA prior to purchasing the EV, as there have been instances where housing associations have prohibited this.

Regardless, the viability of electric cars for inter-city journeys becomes questionable as smaller cities and highways lack adequate charging infrastructure. If you plan to travel between cities, it is recommended to plan the charging schedule in advance. Make sure there are working charging stations along your route and that the hotel or any accommodation you are staying in has a 15 amp outlet installed in the parking lot.

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