At a time when fuel prices and environmental concerns are rising, we are in dire need of finding an alternative to petrol and diesel cars. With the price of oil bound to rise over the next decade, electric vehicles (EVs) have evolved as a better option. One thing that makes them popular 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 the 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 analyse 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.
Common myths about electric vehicle savings
There are a few persistent myths that deter potential EV buyers:
- Myth: EVs are more expensive to maintain.
Reality: With fewer components like spark plugs, oil filters and gearboxes, EVs are easier and cheaper to maintain.
Myth: Electricity is also costly.
Reality: Even with rising electricity tariffs, EVs cost only ₹1.2- ₹1.5 per km, compared to ₹6–₹8 per km for petrol vehicles.
- Myth: Insurance is difficult to get for EVs.
Reality: You can easily buy car insurance for EVs and collect no claim bonus in car insurance to reduce the premiums.
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 of 50 km daily for 24 days in a month, here’s the simple calculation:
Electric car with a 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 year: ₹77 (in Delhi)
- The 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 the running cost of both 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 cost
Apart from the running costs, electric vehicles also help in saving a sufficient amount of money for the 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.
Comparing total cost of ownership: Electric vs petrol cars
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Parameter
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Electric car
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Petrol car
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Purchase cost
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Generally higher due to battery costs; partially offset by subsidies (FAME II, GST 5%)
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Lower upfront cost; no subsidies
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Fuel cost (per month)
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₹1.2-₹1.6/km for about₹2,000-₹2,400/month for 1,500 km usage
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₹7-₹8/km for about ₹10,500- ₹12,000/month for same distance
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Maintenance cost (per year)
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₹3,000- ₹5,000/year (lower due to fewer moving parts)
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₹10,000-₹15,000/year (includes engine oil, filter changes, more wear and tear)
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Insurance premiums
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20-30% higher on average due to expensive battery components and repair costs
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Standard rate; lower due to simpler repair and lower insured value
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Tax incentives
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Available: FAME II subsidy, GST cut, income tax rebate (Section 80EEB), road tax waivers
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Not applicable
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5-year total ownership cost
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Often lower overall when accounting for fuel, maintenance and tax savings (about 15-20% savings)
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Higher, mainly due to escalating fuel and maintenance expenses over time
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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 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.
Role of electric mobility in reducing carbon footprint
Electric mobility not only saves money but also ensures collective responsibility towards the environment.
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 vehicles running on petrol, diesel, or CNG. With the improvement in technology and battery efficiency, this emission can be further reduced to 70 g/km in around 10 years. What this implies is that around 836 million metric tons 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 setups. 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.
Conclusion
Switching to electric mobility is a wise investment today. Whether motivated by savings, sustainability or sheer driving convenience, a shift to EVs delivers on all fronts. With access to car insurance online, maintenance-free driving and long-term cost advantages, the transition is not just desirable, but inevitable.
FAQs
1. Are EVs more expensive to insure?
Not necessarily. Most insurance providers give affordable premiums, and you can buy car insurance online easily. If you maintain a good record, you can even claim your no-claim bonus in car insurance.
2. How long will it take to fully charge an electric vehicle?
It depends on the charger. A standard home charger can take 6–8 hours, while fast chargers take 1–2 hours for an 80% charge.
3. What if I run out of battery in the middle of the road?
Many EVs now come with range prediction systems, and charging stations are rapidly expanding across cities.
4. Are EVs safe?
Yes. EVs undergo rigorous safety tests and come with advanced safety features like battery management systems and collision alerts.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the Insurance industry and products. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.