EVs cheaper to own in long run than ICE cars in India but bumps ahead: BNEF

Mar13,2024


New Delhi: Buying an electric vehicle (EV) is cheaper in the long run internal combustion engine (ICE) models in most vehicle segments in India, but there are concerns over resale value, availability of charging stations and shortage affordable financing The latest report from BloombergNEF shows that barriers to rapid adoption remain.
Less total cost of ownership (TCO) over the life of the vehicles gives them an advantage over ICE models in high-mileage applications such as urban delivery, ride-hailing and intra-city public transit. But here too EVs are facing challenges CNG The report notes that (compressed natural gas) vehicles are driven by the rapid expansion of urban gas networks.
While small passenger EVs are already cheaper than comparable petrol vehicles on a TCO basis in the small car segment, the report said they will become the lowest-cost option in India by 2027.bnef The TCO of CNG cars is estimated to be 6% lower than similar EVs in 2024. In the ride-hailing segment, small EVs already have the lowest TCO, but CNG cars offer stiff competition. “Most drivers in the ride-hailing segment own their vehicles and may prefer CNG over EVs due to lower initial costs and more developed refueling infrastructure.”
In the two-wheeler and three-wheeler segment, the report said EVs three-wheelers “are already significantly cheaper than their ICE rivals in terms of TCO in both the low- and high-speed segments. The two-wheeler and three-wheeler segment has seen the same growth in passenger cars The rapid adoption of EVs compared to the lower to mid segment of the U.S. is primarily driven by multiple offerings at different price points and less concern about range or battery charging.

E.V

“This cost advantage has helped drive sales in the low-speed entry-level segment, where the TCO benefits of EVs are outweighed by their lower driving range and top speed. In the high-speed segment, the uptake of EVs due to higher upfront prices There may be a slowdown and limited availability of affordable vehicle loans,” the report says.
The report makes a strong economic case for the deployment of electric buses on inter-city routes, saying that longer ranges due to comparatively lower refueling and maintenance costs make them more favorable than diesel or CNG buses. .
BloombergNEF analysis shows that if an e-bus covers a distance of 250 kilometers a day, its TCO is 26% lower than the diesel version. “This benefit increases to 31% if buses cover a distance of 300 kilometres,” the report warns, adding that e-bus operators running their vehicles on long-distance routes need to ensure That there are adequate fast chargers available throughout the journey. ,
In the heavy trucking sector, the report said the economy will become favorable after 2030. “For urban and regional duty cycles, EVs are already the most affordable option in most light-duty commercial use cases. This is due to a combination of factors such as declining battery costs, modest driving ranges and diesel trucks in urban traffic. “On the other hand, battery-powered heavy trucks on long-haul duty cycles will only be able to reach TCO parity with diesel after 2030,” says the report.
It added that low TCO may not be enough to drive EV adoption. “There are some additional risks and uncertainties that may push consumers to push back their EV purchases by a few years and choose ICE vehicles instead. Strong after-sales infrastructure and greater availability of services, adequate charging networks and affordable vehicles “Access to finance is needed to alleviate the most pressing customer concerns regarding EVs.”



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