Introduction

As the electric vehicle (EV) growth and adoption increases, many prospective owners ponder a crucial question: “What is the cost of powering my EV?” Fortunately, the answer is a pleasant surprise. Electricity emerges as a cost-effective alternative to traditional fossil fuels when examined on a per-kilometre basis.

According to statistics, Indian domestic tariff varies between INR 5-7 per kilowatt-hour (kWh) for residential EV users across different states. Compared to this, petrol costs INR 100 - 110 per litre, while diesel is INR 85 - 95 per litre.

For example, with running cost of only 0.60p per km for MG ZS, an EV is more cost efficient when compared to Rs.9/km for a petrol car, Rs.7/km for a diesel car and, Rs.4.5/km for a hybrid car over a period of 5 years. The savings can range from 1.5-4 lakh in three years*. (*T&C apply)

This underlines the benefit of choosing EVs. Electricity emerges as the more budget-friendly option per kilometre travelled.

Additionally, fossil fuels, such as coal, oil and gas, are the largest contributor to global climate change, accounting for over 75% of global greenhouse gas emissions and nearly 90% of all carbon dioxide emissions. To mitigate this impact while aligning with India's sustainable development goals, the country's power generation mix is swiftly transitioning towards an increased reliance on renewable energy sources. Presently, India stands as the world's third-largest renewable energy producer, with non-fossil fuel sources contributing to 40% of its installed electricity capacity.

India also has huge ambitions in energy transition and plans to have 500 GW of non-fossil fuel-based electricity installed capacity by 2030 and meeting 50% of energy requirements from renewables in line with the country’s vision to achieve Net Zero emission by 2070 The MoP has constituted a high-level Committee to plan transmission system required for achieving this. The plan envisages additional transmission system and installation of battery energy storage capacity. (Source.)

Factors affecting energy costs: The fine print

Beyond fundamental calculations, several additional factors come into play regarding charging costs for your EV. Charging at home, for example, is the most budget-friendly choice, thanks to the lower rates of residential electricity compared to chargers at public charging stations.

Stability in prices: The electricity advantage

Another significant advantage of EVs lies in the stability of electricity prices, a stark contrast to the often-unpredictable nature of petrol or diesel prices. While petrol and diesel prices fluctuate due to geopolitical events, supply-demand dynamics, and other variables, electricity prices remain more stable. This predictability provides financial security for EV owners, knowing their energy costs will remain relatively consistent over time.

The government of India supports electric mobility by funding research, development, design and providing demand charge exemptions for EV charging. FAME, or Faster Adoption and Manufacturing of (Hybrid and) Electric vehicles, is currently India’s flagship scheme for promoting electric mobility. Every state offers some incentives to you for adopting electric vehicles which includes reduced energy charges (Source).

Environmental and financial benefits: A win-win scenario

Choosing an EV is not just a sound financial decision but also a decisive step toward reducing your carbon footprint. EVs produce zero tailpipe emissions and benefit from the increasing grid adoption of renewable energy sources. From an efficiency perspective, electric vehicles can covert around 60% of the electrical energy from the grid to power the wheels, but petrol or diesel cars can only convert 17%-21% of the energy stored in the fuel to the wheels.

Driving towards a sustainable future

Whether your motivation stems from a commitment to environmental sustainability or a desire to reduce your annual transportation expense, switching to an electric vehicle is a win-win situation. EVs typically offer lower operating costs and reduced maintenance expenses than their fuel-powered counterparts. So, while helping to protect the environment, you are also bolstering your financial well-being.