The car that we currently own was manufactured in 2007 which we purchased in 2011 as an used car. It is now almost 15 years old. The time has come for re-registration. So I was wondering if I should go for the fitness test and get it renewed for another 5 years or if I should simply sell or exchange for a new car. Seeing how there is a lot of excitement in the electric car arena, I was wondering if I should go for it. Although battery EVs are sold on the premise that they save environment I don’t really buy that. No one really knows how much pollution is generated to build the car batteries. Excavating all the rare minerals, transporting and manufacturing of the batteries might cause a lot of pollution. It may not be CO2, it could be some other pollution we just don’t know yet and they still could be as harmful or more harmful than the green house gases. And lets not forget the human rights violation and child labor involved in excavating some of the rare minerals.
In any case electric vehicles may in the long run be more environmentally friendly than gasoline engines. The reason for me to buy an electric car is more of a financial one than environmental. So if I am planning to buy a new car, should it be battery electric or a gasoline engine car purely based on cost of ownership? I generally prefer used cars, but in this case to keep things fair we will use new cars. We will also try to use the gasoline and electric cars with same make and model. There is only one car I can think of when doing a fair comparison and that is Tata Nexon and Tata Nexon EV (not EV Max).
I will compare the gasoline Tata Nexon XM variant with Tata Nexon EV XM electric variant. I know that some features are slightly different in each because one is a gasoline engine and the other is electric. For example electric engines are always automatic :) and the gasoline XM variant uses manual transmission. Likewise the torque of an electric car will almost always be higher and the top speed will almost always be lower when compared with gasoline engines. So lets keep those engine related points out of the discussion because if I were to buy a car in the market today I would certainly not go for an automatic car, nor will I look for a car that produces a lot of torque.
The ex-showroom price of Nexon is Rs. 8.6 lakhs, while the EV version costs Rs. 14.8 lakhs. That is a cost difference of Rs. 6 lakhs! Next comes registration, which is where EV beats out gasoline engines handsomely. Registration charges for Nexon is Rs. 1.3 lakhs while it is just Rs. 8000 for EV because of road tax exemption for EVs. Another big difference comes in the form of insurance. The insurance cost of EV is almost twice that of gasoline engine probably because the biggest cost of EV is battery. Insurance cost of EV is Rs. 1.07 lakhs compared to Rs. 56K.
Now lets talk about subsidies. Fame II gives you Rs. 10,000 per KWh battery and since Nexon EV has a 30 KWh battery, you can get up to Rs. 3 lakhs subsidy. However, it is limited to a maximum of Rs. 1.5 lakhs. While there are more subsidies in some states for electric vehicles, I am not aware of any subsidies other than the road tax exemption in Karnataka where I live. So to summarize, the upfront costs (in lakhs) look like this:
Petrol price today is about Rs. 100 per litre, while electricity costs Rs. 8.15 per KWh. The range of Nexon EV is about 300 KMs. The battery capacity is 30 KWh, so we can drive 10 KM/KWh. Assuming 100% battery charging efficiency (which is not true, it is probably more like 95%), The cost comes out to be Rs. 8.15/KHh / 10KM/KWh = Rs. 0.815/KM. Rounding it off, we can assume cost of running EV is about Rs. 1/KM. The mileage for Nexon is 17.57 KMs/Litre which means it costs Rs. 100/Litre / 17.57 KMs/Litre = Rs. 5.69/KM. Rounding it off, we can assume it to be Rs. 6/KM. So it is 6 times as expensive to run a gasoline engine when compared to an EV.
On an average we have driven about 2000 KMs per year over the last 4 years since I retired. Yeah, I know, that is how little we travel. Well, there was very little travel for 2 years because of lockdowns and travel restrictions. I will assume an average of 5000 KMs/year. That will cost me around Rs. 30,000/year for petrol engine and Rs. 5000/year for EV.
While many EV supporters belabor this point quite a bit, there isn’t going to be a huge difference. Basically, engine oil change won’t be required for EVs, but otherwise most other costs remain the same. There is no transmission and clutch as well, but I never really needed to replace any of them in my Maruti Alto since the last 15 years that it has been in use. The brakes, brake fluid, coolant, tires, suspensions, AC system etc all need routine maintenance. From what I read, it costs about Rs. 25K for 5 years to maintain EV while it costs Rs. 42K for petrol engine.
What many people forget is that the EV battery pack needs to be replaced. Li-ion batteries lose their capacity. While Tata Nexon EV gives 8 year warranty on battery, the battery will lose capacity and you will want to replace it. Otherwise the range will come down. Lets say the battery needs to be replaced after 10 years. The cost of battery is the biggest expense in an EV car. I don’t exactly know how much. I will assume that the cost of battery is the difference between the cost of Nexon Petrol and Nexon EV which is about Rs. 6 lakhs but lets just say it is Rs. 5 lakhs. Of course, the cost of batteries might come down in future, but lets just assume it will be the same for the sake of simplicity.
If I buy a new car I would like to use it for 15 years. So given all this information, lets calculate the costs in lakhs for 15 years, driving about 5000 KMs/year.
So it seems like owning a petrol car is better than an EV with my rough calculations. Even if I don’t replace the EV battery pack, it will still be more expensive than petrol engine car. Unless I drive a lot more per year, there is no point looking at EVs. Moreover, I will not have the range anxiety that is associated with EVs. Having said that, I eventually want to switch to an EV at some point. Just that this isn’t the right time (for me at least).