Will fuel prices result in a shift to e-vehicles?

C Shivakumar @ Chennai:

Will the fuel price increase result in people shifting towards electric vehicles? The rise in fuel prices could be a blessing in disguise for electric vehicle manufacturers who feel it will result in people switching over to electric vehicles rather than traditional fuel based vehicles.

B. C. Datta, Vice President, Corporate Affairs, OLA Electric Mobility, told Express that the rise in fuel prices will see a shift as electric vehicles are more economical than a traditional vehicle.

"The cost of electric vehicle per kilometre is only 50 paise when compared to a traditional vehicle which could cost around Rs 3 per km, while taking into cost the present price of above Rs 100 and the vehicle presumed to be running 50km per litre of petrol and the maintenance costs," said Datta, whose company is likely to roll out the first electric vehicle from Bargur plant in Krishnagiri district in Tamil Nadu.

Nilay Chandra, Director - Marketing and Charging Infrastructure at Ather Energy told Express that oil price rise has definitely impacted the customer’s decision-making towards electric vehicles. “The value for money is an important factor in adapting electric vehicles. It was taking three to four years for any customer buying a two-wheeler to break even but now with the advent of e-vehicles, the customer can even within 18 to 24 months,” he says.

The resale value of the electric vehicle is more than the traditional petrol or diesel vehicle down four to five years, says Chandra. Citing an example of a 125cc Scooter and an electric vehicle, he says that on an average annually, a consumer of an e-vehicle who will be travelling approximately 8,000 to 10,000km will be saving Rs 16,000 to Rs 17,000 taking into account the current fuel prices.

While it is unlikely the fuel price will see any downward revision, the current subsidy of 40pc by Government of India for electric two-wheelers and the exemption from road tax and subsidy by the state government has generated a lot of interest among electric vehicle manufacturers, says Datta.

Tamil Nadu when compared to others has given huge incentives in promoting electric vehicles in its e-vehicle policy which was unveiled in 2019. These include 100% road tax exemption for all vehicles till December 30, 2022, waiver of registration charges or fees as per government of India's notification. The SGST will also be waived. It also announces waiver of e-permits and registration charges for autos and taxis.

 

But then whether the infrastructure is adequate to roll out electric vehicles. Datta says Ola plans to roll out one lakh charging stations across the country. "We are starting next month onwards. It will be implemented phase-wise with the initial target being the major cities after which it will be rolled out in tier-1 and tier-2 cities. It will be a two-year programme," he says.

"It is an ambitious and planned activity that would help consumers to charge wherever they are. We have been talking to petroleum companies. Most of the select petrol bunks will have charging stations.

However, Chandra prefers home-charging. “A consumer who uses the vehicle to go to office would be using it for a maximum 20 to 30km. So it would be ready if he charges the vehicle at home during the night,” he says. He also says Ather is planning to add 500 more charging stations across the country, he says.

Interestingly, the sale of e-vehicles is picking up after the lockdown. The sales in the last 15 days is equal to the volume of sales that we achieved in the month of February, says Chandra, whose companies have launched e-vehicles in Chennai.

“Chennai already contributes to 20pc (last 6 months) of Ather all India sales,” he says while highlighting how the city is adopting e-vehicles.

But then the issue towards the shift from traditional vehicle to e-vehicle is the cost. Admitting that cost is one of the factors, Chandra says that the price difference has come down from Rs 50,000 to Rs 60,000 to Rs 25,000 recently due to government policies. He feels as the volumes of sales increase, the cost will further come down.