People have been using ICE vehicles for decades but there is not enough supply of natural resources in the world. Renewable resources can help to meet the requirements of the ever-increasing demand for energy.
The increasing pollution in the environment has also increased the concern. The government and EV companies are working towards reducing the carbon footprint and moving towards a sustainable future.
The future is electric and the future of EVs is bright as we know it. But the upfront cost of an electric car is very high as compared to a petrol car and thus a big question comes to everyone’s mind is the cost of ownership electric vs petrol- what should I buy considering the total cost of ownership for 5 years?
What is the Total Cost of Ownership (TCO)?
The total direct or indirect cost of the product/system’s financial estimate becomes the total cost of ownership.
The total cost of ownership includes vehicle purchase costs, running costs, fuel, insurance, and other maintenance and service costs. The TCO depends on the size segment of the car and the powertrain types.
for a fair comparison, we have taken Tata Nexon XZ- Petrol Car Vs Tata Nexon EV- Electric Car to compare their total cost of ownership for 5 years.
Total Cost of Ownership of Petrol car
|Tata Nexon XZ- Petrol Car|
|Ex-showroom price||Rs 9,27,400|
|Cost of Insurance||49,098|
|On-road price||10,85,547 ( Total Cost)|
For a car around this price point, typical service costs around Rs. 9,000. If we consider a typical gasoline mileage of about 16 km for 10,000 km, we need about 625 liters of fuel.
Assuming the standard cost of fuel is around Rs 98 per liter, our total fuel cost for 1 year is Rs 61,250. This is Rs 11,55,797 for the first year. Let’s look at the cost of ownership for the next 5 years.
TCO for Tata Nexon XZ for 5 years
Note: all values in Rs
|2nd Year||3rd Year||4th Year||5th Year|
|Cost of Fuel||61,875||62,500||63,125||63,750|
|Cost of Insurance||44,098||40,098||36,098||33,098|
|Cost of Maintenance /Service||10,000||12,000||14,000||16,000|
|Total Cost after 5 years||Rs. 16,12,439|
It is a reduction in the value of an asset over time, due in particular to wear and tear.
9,27,400 – 50% of actual price = 4,63,700 Rs.
EVs are facing one of the big disadvantages in terms of the high initial cost. They are much simpler in construction than ICE vehicles but due to battery technology, the cost becomes so much uneconomical.
Electric vehicles have higher up-front purchase costs but we can save a lot of operating costs on them.
This is why the Indian Government and state governments are offering huge subsidies and tax releases to encourage Electric Vehicles sales and also changing policies to promote the adoption of EVs.
Total Cost of Ownership of Electric Car
|Tata Nexon EV- Electric Car|
|Ex-showroom price||13,29,000 + 5% GST = 13,99,000|
|Cost of Insurance||78,204|
Note: Insurance costs are depending on your state, driving record, the coverage you choose, etc.
Now come to the Fuel cost: The Battery capacity of TATA Nexon is 33.22 Kwh
|Most of the Electric Charging station’s Costs||12 Rs. / Kwh|
|Cost of Charging an electric car in a Week||33.22 × 12 = 398.64 Rs|
|Chargign Cost For 260 weeks||260 × 398.64 Rs. = 1,03,646.4 Rs/ 5 years|
Maintenance and Service Cost of an Electric Car
Electric vehicles are expected to cost less to maintain due to their electric motors and other drivetrain components having fewer moving parts. They don’t need as much maintenance as ICE power vehicles since they don’t require oil changes, air filter replacements, or engine maintenance.
So, we can add on in maintenance costs is cost of tires, lights, brakes, and other miscellaneous things. So, it will be 20,000 for 5 years.
TCO for Tata Nexon EV for 5 years
Note: All values in Rs
|2nd Year||3rd Year||4th Year||5th Year|
|Cost of Insurance||78,204||73,204||69,098||64,098|
|Cost of Maintenance /Service||3,000||4,000||5,000||6,000|
|Total Cost after 5 years||Rs. 19,05,489.4|
Electric Car Battery Replacement Cost
|Charging battery twice a week||52 × 2 = 104 charge cycles|
For most people, charging the battery once a week will suffice. But if we charge the battery twice a week, then 52*2=104 charge cycles are used in a year. Any Li-ion battery has about 1500 charge cycles.
Read More: Tata Nexon EV Battery Replacement Cost
So, we can charge the battery for at least 10-11 years. Then after that, it had to be changed which would cost 5 lakhs. Battery costs will be reduced by 50% in the coming years.
13,99,000 – 50% of actual rate= Rs. 6,99,500
Note: All above costs can vary by state-to-state electricity rate, driving style, road condition, future battery pricing, etc.
Conclusion- Cost of Ownership Electric vs Petrol
Vehicle ownership, whether petrol or electric powered, is a personal choice that should consider many aspects. The prices of petrol might go up in the future. As time passes the petrol powertrains could require a lot of care and maintenance. So, the cost of maintenance could also go up significantly.
On the other side of the coin, the more km you drive the more cost-efficient EVs to get. ICE vehicles give around 40% efficiency whereas EVs are almost 90% efficient. The range and efficiency of EVs become better as time goes on. So, in the longer term, the ownership cost of an electric vehicle might be less.