Electric Vehicles in India 2021
In this post, we will discuss about Electric Vehicles in India, What are types of electric vehicles offered in India (Electric Scooter, Electric Three wheelers, electric cars, buses)?, Go-electric India Campaign, are electric cars successful in India?. We will also find out What are incentives offered by the government of India for Electric vehicles? We will try to find answer for the question - Are Electric Cars really better, cost effective?
Electric Vehicles in India 2021
What are types of electric vehicles offered in India?
Following are various electric vehicle segments in India
1. Electric Two wheeler (E2W) ,
2. Electric Three wheeler (E3W),
3. Electric Four wheeler (E4W)
4. Trucks/Buses EV
What is the demand for Electric vehicles in India?
As per CRISIL report published in February 2020, it has been projected that in 2024, out of the total 3 wheeler vehicles sold, about 43-48% will be 3 wheeler electric vehicles, and about 12-17% will be two wheeler electric vehicles. For 4 wheeler it expects a lower number - 5%.
The higher demand in two wheeler and three wheeler markets will be due to lower vehicle costs while the 4 wheeler passenger car market will grow slower due to their higher costs.
To meet the future demand, India needs to increase their battery production capabilities, increase electricity production and develop a good network of charging stations which is a major stumbling block as of today.
What are Government of India's incentive schemes for growth of Electric Vehicles?
The Government of India has also geared up to push electrification drive and has set goal to make India to have 100% electric vehicles by 2030. In 2019, India launched its FAME (Faster Adoption and Manufacturing of Hybrid and EV) scheme for 3 years. This scheme provides subsidies for manufacturing of electric vehicles and developing charging infrastructure. It had budgeted about Rs 10000 crores to give boost to electric vehicle industry. The budget also offered a tax subsidy to individuals on loans for Electric vehicles which can help in increased adoption.
In February of 2021, Nitin Gadkari, Union Minister for Road Transport & Highways launched the "Go Electric Campaign" for India. This is for spreading awareness on the benefits of e-mobility and EV Charging Infrastructure as well as electric cooking in India. Go Electric Campaign is to help India become greener and pollution less. This will also give boost to electric vehicle industry.
Recently, the FAME II policy has been extended by another two years till March 31, 2024. The revised scheme has increased the purchase incentive by 50 percent to Rs 15,000 per kWh compared to Rs 10,000 per kWh earlier. The maximum limit is also increased to 40 percent of the e-two-wheeler cost compared to earlier 20 percent.
Looking at greater demand for E2Ws and E3Ws, many companies have opted for subsidies in these two segments.
In addition to central government, the state government also has launched incentive schemes for purchasing the electric vehicles.
Are Electric Cars really better, cost effective?
There are various costs associated with car ownership, regardless of the kind of vehicle you want to buy. Adopting an electric vehicle over a normal internal combustion engine (ICE) vehicle can save you a lot of money in the long run. If you're thinking about buying a new car and considering an electric vehicle as an alternative, you should know what will be cost of ownership and how an electric vehicle can lead to distinct types of expenditure and savings when compared to traditional ICEs. The 3 parameters are - cost of fuel, cost of maintenance, cost of ownership.
Cost of Fuel (Running cost):
The electric cars will cost less in fuel (electricity) cost as compared to ICE cars over a longer period.
Let us understand this by an example.
Tata Nexon EV battery power is 30.2 KWh. If we consider Rs 10 /kWh as cost per unit of electricity. it will take Rs 302 for charging this battery. Tata Nexon EVs range is 312 km / charge. We can take 80% of this value as a realistic figure which is around 250 km / charge. Hence the cost per km will be 302 / 250 = Rs 1.21 per km approx.
Tata Nexon AMT has rated fuel efficiency of 16 Km / lit. But with Indian road conditions, we can consider an average fuel efficiency of 14 km / lit. One liter of Petrol now costs around 100 Rs. So per km cost will be 100 / 14 = Rs 7.1 per km. In city, this cost could go even higher.
So if you drive 50 km per day, total KM in 5 years will be 66000 Km assuming 22 days driving days per month.
Running Cost of EV = Rs 79860 vs Running Cost of ICE = Rs 468600.
This shows significant savings. For City driving conditions, these savings will be much more due to in-efficient traditional car mileage in city.
Cost of Maintenance:
EV has less number of moving parts, no combustion engine and less oil requirement. It has motor and battery as major maintenance items. Hence the maintenance cost will be less for EVs. Since we do not have sufficient data for the same, we will take data published by Tata for their Nexon EV model. As per them, it will cost 50% less than the ICE counterpart. They have included 8 year battery warrantee in arriving at this cost.
Cost of ownership:
The cost of ownership seems higher for EV than ICE vehicles. But due to following three incentives, the cost difference will become less. It varies state-wise.
1. Tax incentive of 150000 for loan repayment under section 80EEB
2. Waiver on road tax and registration (15% subsidy upto 100000)
3. For commercial vehicles, incentive of 10000 per kWh of battery capacity
Although the running cost of EVs give lot of savings over a 5 year period, the initial cost will be higher and it will make the overall cost of ownership to be similar. But as the volume increase and battery cost is reduced and efficiency increased in future this cost is expected to go down.
Few disadvantages of EV as compared to ICE are its lower range per charge and higher charging time. For re-fueling a traditional car, it takes just few minutes and you are ready to go but for EV it will take few hours unless you carry a spare battery which charges while one is in use.
But due to people preferring green, less polluting products with less noise, the EV seems to a good replacement for the traditional ICE variants.
Please check out my other related posts in Electrifi India blog
Which is most selling electric car in India? - Tata Nexon EV
Hero Electric Atria - Electric Vehicle Two Wheeler
Right time to buy Electric Two Wheeler in Maharashtra | How much is subsidy on two wheelers?
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