Eight months ago, I moved to Hubli, Karnataka. Since then, my dependence on personal vehicles has shot up tremendously. Back in my hometown of Mumbai, a city where the public transport system is the lifeline, personal vehicles always seemed inessential. But in cities like Hubli, having your own vehicle is more of a need than a want. And I’ve reached that stage where I need a vehicle of my own to get around. My research and evaluation led me to the conclusion that electric vehicles trump traditional vehicles, hands down. And today, I want to share with you exactly why.
The Benefits of Owning an Electric Vehicle, Financial and Otherwise
At the outset, the cost of purchasing an electric vehicle might seem high, but the long-term benefits far outweigh the pinch of this initial outflow. Let’s take a look at what these benefits are.
EVs Save You Money by Reducing Running and Maintenance Costs
When it comes to the cost of fuel and maintenance, electric vehicles emerge the clear winner. Both these costs are recurring in nature. And EV users have reported huge savings here.
If the cost of fuel for a petrol car is Rs.9-10 per kilometre, it goes down to Rs.1-2 per kilometre for an electric car. Similarly for a two-wheeler, the price per kilometre can go down from Rs.2.5 to Rs.0.5.
Here’s another way to look at it. With a daily commute of 35 kilometres, you could save up to Rs.3.5 lacs in five years using an electric vehicle (considering the petrol cost is Rs.105 per litre).
Image courtesy: https://nexonev.tatamotors.com/
Encourages a More Sustainable Way of Living
More than benefiting your pocket though, the primary benefit is the reduction in your carbon footprint. Research shows that EVs emit fewer greenhouse gases and air pollutants than petrol or diesel cars. And this is considering their production and electricity generation as well.
Another factor to consider is that electric vehicle motors have fewer moving parts than traditional vehicle motors. This makes EVs a lot quieter. In a world where noise can often overpower our thoughts, changing the soundscape is a bold vision that companies like BMW are aiming for. Imagine you are part of an orchestra, and your EV is the musical instrument that plays like a violin!
Looking at the bigger picture, EVs are the future. The United Nations has laid down 17 sustainable development goals. Of these, climate change and sustainable cities and communities are two goals that would promote a revolution in the automobile industry. Governments of all countries are taking action, including India.
Steps the Government is Taking to Make EVs More Affordable
Low GST Rate
With effect from August 1, 2019, the Goods and Service Tax charged on electric vehicles has been reduced from 12% to 5%. Whereas, for regular vehicles it is 28%.
To give you some perspective, goods that fall under the 5% bracket are edible oil, tea, life-saving medicines such as insulin, among others. And some goods that fall under the 28% bracket are tobacco, pan masala, aerated drinks and aircrafts bought for personal use. Electric vehicles are essential for a sustainable future. And the move to bring down the GST rate on EVs is in sync with this belief.
Tax Benefits
Section 80EEB of the Income Tax Act provides special benefits for loans taken to buy an electric vehicle. If your loan is sanctioned between April, 2019 and March, 2023, you can claim a deduction of the interest portion payable. The maximum deduction amount is Rs.1.5 lacs. This is another move that encourages people like you and me to choose electric vehicles over traditional vehicles.
Central Subsidies
The central government is promoting electric vehicles through Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME) policies. Unlike other subsidies, where you are required to submit certain documentation, the FAME II subsidy is already factored into the ex-showroom price of the vehicle.
Take an example of Ather’s pricing in Karnataka below.
Image Courtesy: https://www.atherenergy.com/
State Subsidies
Based on battery capacity, various states offer subsidies on electric vehicles, including early-bird incentives. As of now, Delhi, Gujrat, Maharashtra, Rajasthan, Meghalaya, Karnataka, Andhra Pradesh, Telangana are the only states to have policies on EVs. Other states are still working on it.
State subsidies are offered in a similar way as the centre. In some cases, the subsidies are already adjusted when you pay the final price. In other cases, you may have to submit documentation to receive the amount in your bank account. Regardless, these are good steps.
For a comparison in state prices, here is a screenshot of Ather’s pricing in Maharashtra:
Image Courtesy: https://www.atherenergy.com/
The states of Karnataka, Andhra Pradesh and Telangana do not provide direct subsidies, but they have eliminated road tax and registration fees entirely.
The electric vehicles market in India is evolving rapidly. While the immediate effect will be seen in the two and three wheeler market, it will slowly catch up to four-wheelers too. Established companies like Hyundai have even stopped their research on internal combustion engines and are focusing on electric vehicles.
Leading Change
We spoke with Nishant Prasad, Cell Engineering Lead at Ather Energy, about his view on this market moving the needle in the coming years. And he shared some illuminating insights. “There is a lot of impetus to move to electric in a big way, especially in the two-wheeler segment. We see a shift from motorcycles to scooters. Changing gears is painful for city commutes, and households with women prefer to opt for scooters. Marketing campaigns across companies are raising awareness of alternative technologies. With established OEMs betting big on EVs, we could definitely see a substantial shift to EVs in this decade. The four-wheeler segment has a much slower adoption rate though. We’ve noticed that most four-wheeler purchases are second purchases, meant for intra-city commutes.”
Regarding the cost of EVs, Nishant adds, “This (cost) is one of the major stumbling blocks for EVs. Prices of nickel, cobalt and other raw ingredients required to make the batteries are high. But the FAME subsidies are good. There is a lot of pressure to bring prices down.”
Learning from Norway
Norway is the perfect example of how government measures have encouraged citizens to go electric. The country’s policies give numerous benefits when one buys an electric vehicle. Starting from zero sales tax (or GST), to no tolls, no registration fees, free parking, free charging, a separate lane to drive and tax benefits. All these subsidies definitely encourage more people in Norway to shift to electric vehicles.
Electric vehicles don’t just benefit us financially. They bring about a change by making us more responsible. If we don’t strive for a better future for our planet, who will? I know I’m going to be riding my own EV in Hubli soon.
PS: Investing in this sector is another way to play a part in the EV story.
PPS: Here’s an intriguing video from BMW, Orchestra of Silence, featuring Hans Zimmer and his role in shaping the soundscape of the future.
