Electric cars: High upfront pay, but running cost low

With the Delhi smog unsettling almost everyone, including citizens and government, the focus has shifted sharply towards lower-pollution vehicles. Electric cars are considered the best option. Most proponents back these vehicles for two reasons — lower pollution and cheaper running costs. But, is the low-cost proposition really true? Let’s look at the options first. Currently, only one company — Mahindra Electric, and two models, the e20 Plus P4 and Verito – are available for a prospective electric car buyer. Things might be different in a year or two. Leading car companies Volvo, Nissan, Toyota and Tata Motors are working on plans to introduce electric vehicles in a few years. Even Tesla has been talking about launching electric cars in India for a while.  

More upfront cost, lower running cost: The cost of a vehicle is at least 20 per cent higher than that of a comparable car running on petrol. The e20 Plus P4 is priced at Rs 7.46 lakh (ex-showroom) in Delhi and Verito’s costs Rs 9.25 lakh (ex-showroom). 

Mahesh Babu, chief executive officer, Mahindra Electric, however, points out that the running cost is dramatically lower at around 80 paise a litre, a fifth of what you would fork out on a car using petrol. Clearly, the higher upfront cost of acquiring an electric car can be made up within a few years due to the petrol-electricity cost difference. 

There is also a leasing option from Mahindra Electric. The e20 Plus P4 is available on a four-year lease for a monthly payment of Rs 15,999, including road tax, insurance and scheduled maintenance. 

So far so good, but how does one charge this vehicle? Unfortunately, charging the car takes a lot of time — about 90 minutes on a fast charging station which costs about Rs 2-3 lakh. But, if you want ultra-fast charging stations, which do the same in 15 minutes flat, they come with a stiff price tag of Rs 20 lakh. The third option:  Use slow chargers which are meant to charge the vehicles overnight at home, an option available with the Mahindra Electric. Even if you stay in a flat, for instance, the company offers you a socket which can be connected to your electric meter. Babu points out that their research has shown car users generally drive for not more than two-four hours a day. So, there is enough time when the car is stationary and is in the parking lot to charge the car. If you fall in this category of user, buying this car could be quite attractive. 

But, if you are dependent on charging stations, it isn’t a happy proposition. Unlike China, which has 150,000 charging stations, there aren’t more than 400 charging stations across the country and the bulk of these are in Delhi and the National Capital Region (NCR). And, while licences have been given to set up more stations, their numbers are nothing compared to the proliferation of petrol pumps. As many experts say, the real inflection point for electric vehicles will be when the price of an electric car would match that of a gasoline vehicle and when consumers will be able to charge their batteries as easily as they refuel their tanks. 

Reasonable travel distance: If you want to travel between Delhi and Mumbai or vice versa, please don’t travel in an electric car. While Mahindra has improved its battery considerably and now a single charge can allow you to drive 160-180 km, it isn’t for long-distance driving. But, it is more than enough for daily commuting in most cities across the country. The good news:  Work is already on to push this number to 200-400 km, which means travelling from Mumbai to Pune or Delhi to Chandigarh could be possible soon. 

How long does a battery last? It’s perhaps the biggest worry because the battery cost constitutes about 40 per cent of the cost of the car (almost Rs 3 lakh if you consider an e20 Plus P4). And, if you have to replace the battery every couple of years, it could be a major cost. The good part is that most of the batteries used currently have a life of over five years. 

However, battery prices are falling dramatically and are expected to fall by another 60 per cent in the next 12-24 months. Two, in a few years these batteries won’t have to be imported. Many Indian companies, led by a Maruti Suzuki joint venture and state-owned Bharat Heavy Electricals, among others, are setting up operations to manufacture these. 

Two-wheelers may come soon: While there aren’t any two-wheelers powered by a lithium battery on the roads yet, next year seems more promising. Bengaluru-based Ather Energy, a company partly funded by Hero MotoCorp and the TVS group, are hoping to launch electric scooters by next year. Delhi-based  Twenty Two Motors unveiled its new electric scooter last week. As far as motorbike lovers are concerned, Pune-based Tork Motors is slated to launch its vehicle commercially. 

Eicher Motors’ chief executive officer Siddhartha Lal says they have set up a core group to start ideating on an electric motor bike in the above-250cc segment. “However, a product is a long way off and we do not want to be the innovator,” he says. 

The proposition of a high-acquisition cost and a low-running cost is true to two-wheelers also. Ather Energy’s co-founder Taru Mehta points out that they are looking at pricing their electric scooters at around Rs 1.25 lakh, close to a Vespa. But again, the running costs will be much lower. “In a gasoline scooter, a rider has an average fuel cost of Rs 16,000 annually. In an electric scooter, he will have to spend just Rs 2,000 a year,” says Mehta. 

Effectively, the total cost of ownership will be lower by Rs 40,000 over a three-to five-year period over a gasoline scooter. Even the battery life might be significantly higher. Tork’s founder Kapil Shelke says that they are putting up a battery in the motorcycle which assures a running life of 100,000 km, enough for a five to six-year run.  

Keep these in mind
  • Upfront cost is 20 per cent higher, but running costs will be just a fraction of a petrol car 
  • There are lease offers from Mahindra Electric. Pay Rs 15,999 a month (in Delhi) for four years and drive the e20 Plus P4. This cost includes insurance, road tax and also scheduled maintenance   
  • Since there are fewer parts, the maintenance bill will be much lower
  • Fast charging takes 90 minutes (cost Rs 2-3 lakh), ultra-fast charging takes 15 minutes (cost Rs 20 lakh) and overnight charging options are there with a 230 volt, 15 ampere socket 
  • Most batteries run for more than five years