India lags peers in cost of electric vehicle ownership compared to ICE cars

EVs here cost 25% less as against 50% in the US, 41% in France and 29% in Germany

The total cost of ownership (TCO) of an electric car such as Tata Motors’ popular Nexon EV Empowered MR, including state subsidies, in a city like Lucknow in Uttar Pradesh is around 25 per cent lower than that of an equivalent internal combustion engine (ICE) car, according to company estimates. 
 

The TCO savings that a consumer makes over an equivalent petrol-powered car is a substantial Rs 4.59 lakh over five years.  

However, because of a hike in price, the model is no longer eligible for the FAME II subsidy. And there are some states which do not offer any subsidy on it at all. Hence, in states which provide no subsidy the TCO savings on the Nexon EV would be around 15 per cent, compared to an equivalent ICE car. However, there are other states which offer more than Rs 1 lakh subsidy.     
 

Data from Nomura shows that the TCO of electric cars in South Korea (based on the comparison between Tesla Model 3 and the petrol model of the BMW 3 series) is lower by around 27 per cent over the gasoline car, and in Germany it is lower by 29 per cent. 

In the US, the comparison is even more attractive. To incentivise the buying of electric vehicles, the TCO of the same Tesla Model 3 is 50 per cent lower than the BMW petrol model. In France, it is 41 per cent lower.  

 

The larger gap in the TCO between gasoline cars and EVs in the US is, of course, because of the high subsidy, the tax credits as well as the benefits provided at the state level, all of which amounts to about $11,000 for the Model 3.
 

In the case of France, EVs are more attractive because of the low electricity costs in the country.
 

The TCO of EVs has been calculated on the basis of the total on-road price of the car after subsidies (compared to normal on-road price of an ICE car), the cost of electricity (compared to the cost of fuel in an ICE car), and maintenance costs.
 

While in India the calculation is based on cars running 15,000 km a year, the Nomura estimates are based on cars running 50 kilometre a day. In India what a consumer forks out for electricity per kilowatt hour (kWh) to run the Nexon EV is nearly one-tenth (around Rs 10) of the cost of a litre of fuel used in an ICE car. Also, the cost of ownership, which includes the cost of running per kilometre is a mere Rs 1 to Rs 1.1 per kilometre, and servicing costs are 65 per cent of that of an equivalent ICE car.
 

In the US the cost per kWh of electricity ($0.30) used in electric cars is one-fifth of that of a litre of gasoline, in China it is one-sixth, and in Germany it is only a fourth. But in France it is nearly one-ninth (similar to the Nexon), according to Nomura.
 

The US, which has come late to the conversion of ICE vehicles to EVs, is clearly ready to give large subsidies to make the electric models attractive. The difference can be gauged from the fact that for the same Tesla Model 3 the EV subsidy in South Korea is only $3268, in Germany it is $4815 and in France  $5320, while in the US it is as much as $11,000.