Electrical vehicles are becoming the new sensation all over the world, new research and technology, as well as technological advancements, have been going on. It was believed that this adoption curve will soon see its effect in India too. But while electric two- and three-wheelers have led the onset of electric vehicles (EVs) in India, many individual buyers in the passenger car space are keeping away from buying an electric car.
Why buying EVs is not the right time in India
A strategy consultant firm Kearney in its white paper released on electric mobility stated that For buyers of Electric Vehicles, the total cost of ownership (TCO), which includes the cost for acquisition, running, and maintenance, is the most important factor determining the viability of the vehicle, and for most Indian customers cost is an important factor whether it is the maintenance and running cost. Being more inclined to the savings culture make them more cost-conscious and search for more cost-effective solutions that will suit their pockets.
A cost analysis done by Kearney further reveals is higher for electrical vehicles than their conventional-fuel counterparts. “At current petrol prices, the TCO for electric cars is costlier than for petrol cars with the daily running of less than 40 to 45 kilometres. At distances beyond this threshold, electric cars offer a favourable TCO proposition. Most people in Indian cities travel about 35 to 40 km a day between their homes and workplaces, which limits the savings from the lower running costs of EVs,” the white paper said.
The already available alternatives CNG and the upcoming LNG will provide strong competition to the electrical vehicles considering their cost advantage for passengers with low daily usage. The TCO analysis for electric and CNG vehicles suggests electrical vehicles offer a favourable proposition only above a daily running of 170-180kms, making it much more attractive for commercial fleet applications than for the individual buyers.
Battery cost is high
Batteries occupy a significant portion of the vehicles total cost at current technicalities “At the current battery pack cost per kWh and the share of the battery in the overall vehicle cost, a 30 to 40 per cent reduction in battery cost will lead to acquisition cost parity of electric vehicles with petrol and compressed natural gas offerings. Given the current trends in battery pack technology, it would take another three to five years before batteries are available at such price points in India,” according to Kearney.
Effect of a pandemic on EVs market
The outbreak will probably have a further adverse effect on the already slowed down adoption of the Electrical Vehicles and will push it back by a few years.
“Macroeconomic factors and COVID-19 have led to a fall in crude oil prices, disruptions in supply chains, and a drop in consumer demand across industries. This could slow the thrust on widespread electric vehicle adoption. The short-term industry situation may give OEMs a reduced appetite to invest in newer offerings and diminish consumers’ incentive to move toward electric vehicles due to the reduced differential in running costs,” the white paper noted.
Lack of charging station
One of the biggest stumbling blocks for the success of deploying electric vehicle in India is the lack of adequate charging infrastructure. This lack of proper infrastructure is a deterring factor for people and an obstacle for the running of electrical vehicles on Indian roads. The economic instability will lead to further slow down due to prioritised spending in other sectors, the government may also have a reduced ability in providing long-term financial assistance to boost EV adoption and charging infrastructure.
The current trade barriers and the tense situations with china will lead to further disruptions as the reliance on imported components and parts even as India takes time to build local capabilities
As there are only 2-3 options in the market for EV in INDIA right now and very less charging stations which are even limited to cities only and as batteries costing half the cost of a vehicle so we should have to wait to buy Evs in India for at least 3 years.