Looking to buy an electric car?

5 MinsApr 26, 2021

Ankit Nayak is looking to buy a car. And given the buzz around electric vehicles, he is considering buying an electric car. The fact that an EV less polluting than a regular vehicle and hence good for the environment, is already a big plus point, as far as Ankit is concerned. But he is unsure if it is the right decision from the point of view of price, maintenance, mileage and so on. He decides to speak with his friend Suresh Pandya, an automotive journalist before making a decision. Here is how the conversation went.

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Ankit: I am not sure if an electric car is the best option for me. Can you help me out with this?

Suresh: Sure, I can, but before that, you need to answer three questions:
1.    What is your reason for buying a car? Is it for intra-city commute, or do you intend to go on longer trips on holidays?
2.   If it is for a daily commute, how many kilometres would you be driving?
3.   How long do you plan on holding on to your car? For instance, will you look to upgrade soon?

Ankit: This is a car that will get me from home to the office and back. I drive around 50-60 km a day on average. I plan on driving this vehicle for at least 8-10 years. I may take the car for short weekend trips, but I don't see myself driving long distances in it.

Suresh: In that case, an electric car makes perfect sense for you. Let me list out a few features and benefits of EVs:

The biggest concern for electric cars owners is how much can you drive on a single charge. This is because, unlike, say, petrol pumps for regular cars, we still don't have a widespread network of charging points for EVs. So, ideally, you should be able to reach a charging point before the battery runs out. Given the traffic situation in our cities, you may get 200-250 km on a single charge.

Ankit: So, you are saying I shouldn’t opt for an EV?

Suresh: On the contrary! If you are primarily using it for city commutes, an EV is the best option. If you say that your commute is 50-60 km a day, a single charge will last you for three days. Besides, you can always recharge once you get back home in the evening to ensure that the battery is fully charged when you drive off in the morning. What's more, even if you want to take it for short weekend trips – say Mumbai to Pune – you should be fine, provided you recharge the car in Pune.

Ankit: But isn't the availability of charging points a significant constraint?

Suresh: Undoubtedly, EV charging points are not as common right now as petrol pumps. But that is bound to change in a couple of years. In any case, if your primary objective is commuting in the city, where you will be charging the battery after coming home, remember that a 15 ampere AC charge will take you around nine hours to charge to 100%. If you use a fast DC charger, it’ll get from 0 to 80% in one hour. The final 20% always takes a long time to recharge because a lithium-ion battery needs to be preserved.

Ankit: Are EVs economical?

Suresh: This is a bit tricky. Today, electric cars are 25-30% more expensive than other cars, at the time of buying. But once you factor in the operating cost, the math looks radically different. Typically, if you consider an EV would cost you about Rs. 1.2-1.4 km for charging. A typical – petrol or diesel-based car – will cost you between Rs. 8-9 per km. Assuming you work for 20 days a month and commute 40 km a day, you drive 800 km a month and spend Rs 640 on charging your car. For an average car, that’s Rs 7,200. That’s Rs 6,560 per month savings or Rs 74,880 a year. At this rate, you would cover the additional acquisition cost in about three years. And that is not counting the subsidies and cost of spares.

Ankit: What do you mean subsidies?

Suresh: Several state governments, in a bid to encourage ownership of EVs and reduce vehicular pollution, are offering subsidies to buyers. These sometimes range up to Rs. 1.5 lakh. You can also get tax benefits under Section 80EEB for loan repayments on your EV loan up to Rs. 1.5 lakh.

Ankit: You also mentioned something about the reduced cost of spares?

Suresh: What you need to understand with EVs is that fundamentally they have far fewer moving parts than normal internal combustion (IC) engine based cars. Because there are fewer moving parts, there is lesser wear and tear. So, the maintenance costs for an EV are a fraction of a typical IC vehicle over an 8-10 year span.

[Also Read: Know the benefits of buying an electric car]

After this conversation with Suresh, Ankit is sold on the idea of buying an electric car. He could consider an electric car loan from Axis Bank. Axis Bank offers car loans for EVs in select cities, namely Delhi NCR, Mumbai, Bengaluru, Hyderabad, Pune, Jaipur, Ludhiana, Kochi, Ahmedabad, Chennai, Vishakhapatnam, Trivandrum, Surat, Kolkata and Chandigarh. The car loan is available for both salaried and self-employed customers and offers up to 85% on-road funding. The tenure of the loan is up to seven years. With Axis Bank's EMI calculator, you can plan your car loan EMI easily.

Disclaimer: The Source, a Mumbai-based content creation and curation firm have authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.