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Insurance Article

Read to Know How Electric Mobility Can Affect Your Savings

December 04 2018

Driving cars with electric mobility can help you save a lot on fuel and maintenance charges

At a time when fuel prices and environmental concerns are rising, we are in dire need of finding an alternative for petrol and diesel cars. With the price of oil bound to rise over the next decade, electric vehicles (EV) have evolved as a better option and one thing that is going for them is their low running cost.

The government of India aspires for a nation with 100% electric mobility by 2030. To support this agenda, some significant steps have been taken by the government, such as the launch of the National Electric Mobility Mission Plan in 2013 and FAME India scheme in 2015.

What can be the effects of 100% electric mobility?

From India’s perspective, switching to complete electric mobility by 2030 makes sense. There are over 200 million vehicles on the road, estimated to rise to 300 million by 2030. This means that India’s oil import bill which is about USD 80 billion presently could rise to about USD 150 billion by the next decade. What this means is that switching to electric vehicles could save about USD 60 billion in fuel costs and simultaneously cut down 1 gigatonne of carbon emissions.

Let’s analyze other factors to understand how switching to electric mobility can affect the monthly budget of a common man and understand the real impact of this transition in the country.

How much amount can be saved per month?

Depending upon the vehicle and the electricity tariff in your area, a full charge for an EV is far more cost-effective than filling up a tank. Let’s calculate the difference it makes if you use an electric car rather than a petrol one for a month. Assuming that you need to travel an average 50 km daily for 24 days in a month, here’s the simple calculation:

Electric car with full range of 140 km

  • Total electricity consumed for full charge: 16.5 units
  • Electricity usage per km: 16.5/140= 0.12 unit
  • Maximum cost of electricity: 6.5 per unit (in Delhi)
  • Total running cost per km: 6.5x0.12= 78 paise
  • Total cost for running 50 km in a day: 50x0.78= ₹39
  • Total expenditure in a month: 39x24= ₹936

Petrol car with assumed mileage of 15kmpl

  • Daily consumption of petrol: 50/15= 3.33 litres
  • Average price of petrol this yea: ₹77 (in Delhi)
  • Daily cost of running 50 kms: 77x3.3= ₹254.10
  • Total monthly expenditure: 254.10x24= ₹6098.40

As concluded from the above calculations, the total monthly difference in running cost of both the cars is ₹(6098.40-936) which amounts to ₹5,162.40. This proves how electric mobility can boost your savings. Here are a few more reasons to consider electric mobility:

Low maintenance costs

Apart from the running costs, electric vehicles also help in saving a sufficient amount of money for care and maintenance of the vehicle. Unlike petrol and diesel cars, electric engines do not require expensive maintenance work, as frequently. This is because in a traditional combustion engine, there are hundreds of moving parts, whereas an electric motor has fewer than 20, which imparts long-term durability and lower maintenance needs.

Tax credits and rebates

The Indian government has also laid out an incentive program to reduce the road tax charges for electric vehicles significantly. It is also offering substantial tax rebates to those who purchase electric vehicles in an effort to spur demand for these cars and reduce the dependence on oil. Apart from this, various state governments are also planning to offer tax incentives for going electric.

Reduction of environmental degradation

Electric vehicles emit about 100 g/km of carbon dioxide for a mid-sized hatchback as against 135g/km for similar vehicle running on petrol, diesel or CNG. With the improvement in technology and battery efficiency, this emission can further be reduced to 70 g/km in around 10 years. What this implies is that around 836 million metric ton of crude and about 1 gigatonne of carbon footprint can be saved if complete electrification takes place.

Having said that, all is not gold with the electric cars. Unlike petrol cars, electric vehicles require a substantial amount of time to fully charge. Additionally, charging stations are few and far between in the country, even in urban set-ups. Also, it may demand a battery replacement every 4-5 years which may prove costly. A comprehensive motor insurance policy can however help you cover such costs to an extent.

Related Article:

Planning to Purchase an Electric Car? Read This First!
Ways to Reduce Your Car’s Carbon Footprint

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