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EVs are more economical in India, but they are facing big hurdles

New Delhi: According to a recent analysis by BloombergNEF, electric vehicles (EVs) in India offer lower lifetime costs compared to traditional internal combustion engine (ICE) models in most vehicle segments. This makes them a more economical choice, especially for high-mileage applications such as urban deliveries, ride-hailing, and intra-city transit. The study found that small passenger electric vehicles are already more cost-effective than their gasoline counterparts in terms of total cost of ownership (TCO). By 2027, it is projected that EVs will become the least expensive option in the small car segment.

However, compressed natural gas (CNG) vehicles currently have a 6% lower TCO for 2024, posing competition to small EVs in the ride-hailing segment. The report highlights that CNG vehicles are preferred due to their lower upfront costs and well-established refueling infrastructure.

When it comes to inter-city routes, electric buses have a distinct economic advantage. They outperform diesel and CNG buses in terms of lower refueling and maintenance expenses. The TCO of an e-bus is 26% lower than a diesel variant for a daily run of 250 kilometers, increasing to 31% for 300 kilometers. This highlights the potential savings and efficiency of using electric buses for long-distance travel, provided there is sufficient fast-charging infrastructure.

However, the adoption of electric three-wheelers may require further support. While sales in the low-speed segment benefit from the TCO advantage, the high-speed segment faces challenges due to higher upfront costs and the scarcity of affordable vehicle financing options.

The analysis also indicates that the heavy trucking sector’s shift towards EVs will become economically viable post-2030. Urban and regional light-duty commercial use already favors electric options due to decreasing battery costs and the inefficiency of diesel trucks in urban traffic.

Despite the favorable TCO of EVs in most vehicle segments, the report identifies significant barriers to widespread adoption. Concerns over resale value, charging infrastructure, and accessible financing are major factors hindering the shift towards electric mobility in India. The report further added that focused interventions are needed to address these consumer hesitations and encourage the adoption of electric vehicles.

Mar 10,2024

Source: Economic Times