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Total Cost of Ownership (TCO) between Electric Vehicles and ICE Vehicles
Total Cost of Ownership (TCO) between Electric Vehicles and ICE Vehicles

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While purchasing an electric vehicle, the end consumer always wants to check whether they will get the value for their investments. Though a key tool towards achieving a sustainable environment and reducing the planet’s dependency towards fossil fuels, the cost of the vehicle still acts as a major deterrent for many buyers who contemplate on purchasing an electric vehicle.

 

Due to advancements in technology, the costs of running and maintaining Electric Vehicles are lesser in the long run as compared to regular Internal Combustion Engine (ICE) vehicles.

A comparison for each type of vehicle with its ICE counterpart is shared below.

In each example, the left side graph depicts the comparison in cost per km across a 10 years lifetime for EV and ICE vehicle and the right side graph depicts the overall cost breakdown over 10 years between the two vehicles.

 

While comparing ICE and EV- 2wheelers we can ascertain that the cost per km across 10 years for the regular ICE vehicle is almost 3 times than the electric vehicle. At the same time, while analysing the operational cost breakdown over 10 years of both type of vehicles, cost of ownership of the ICE vehicle is significantly higher than the EV, making a case for owning an EV in the long run.

 

EV 7

 

Similar comparisons can also be seen in 3-wheelers and 4-wheelers, where owning an EV is significantly cheaper than owning a regular vehicle over a 10 year horizon. Across 3 wheelers the difference has been over 60% higher for an ICE vehicle in cost per km and over 3 lac difference on a 10 year operational cost breakdown.

 

EV 8

 

Likewise, cost per km over 10 years for an ICE 4-wheeler is almost Rs. 3.78 higher than an EV, while operational costs are almost double over 10 years for an ICE vehicle when compared to an EV.

 

EV8

Source – Bureau of Energy Efficiency

 

Even though the upfront cost for an electric vehicle is higher, over a longer term, across all the different kinds, electric vehicles are much more economically viable. In addition, the Indian govt. has also been offering attractive subsidies and tax breaks towards the purchase of EVs. Hence, EVs should definitely be considered while consumers are pondering over their next car purchase and the day is not far when EVs become the primary vehicle of every household.

 

Read more insights in the report – “The Future is Electric - Discussion paper on Electric Vehicles in India”

NASSCOM Community -  https://community.nasscom.in/communities/engineering-research-design/future-electric-discussion-paper-electric-vehicles-india

NASSCOM Website -  https://nasscom.in/knowledge-center/publications/future-electric-discussion-paper-electric-vehicles-india


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Vandhna Babu
Principal Analyst - Research

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