Will EV become cheaper? EVs cheaper than ICE Vehicle by 2027
H. Karan Kumar
As we witness the dawn of a new era in the automotive industry, the shift from conventional internal combustion engines (ICE) to electric vehicles (EVs) is becoming increasingly prevalent. This transition, however, is not without challenges. Despite the total cost of ownership (TCO) of EVs being lower than their ICE counterparts in most vehicle segments, their adoption in India has faced various hurdles.
The Economic Advantage of Electric Vehicles
According to a recent study by BloombergNEF, electric vehicles for small passengers in 2024 are already a more cost-effective option than gasoline vehicles in terms of TCO. Furthermore, by 2027, EVs are projected to emerge as the least expensive option in the small car segment. Interestingly, compressed natural gas (CNG) vehicles currently present a 6% lower TCO for 2024.
“In the ride-hailing segment, small EVs already have the lowest TCO but face stiff competition from CNG vehicles,” the report highlights, attributing the preference for CNG to its lower upfront costs and more established refuelling infrastructure.
Electric Buses: A Promising Prospect
Electric buses have shown a particular economic advantage on inter-city routes, outperforming diesel and CNG buses due to lower refuelling and maintenance expenses.
“The TCO of an e-bus is 26% lower than a diesel variant for 250 km daily runs, increasing to 31% for 300 km,” BloombergNEF states.
This underscores the potential savings and efficiency of deploying electric buses for long-distance travel, provided there is sufficient fast-charging infrastructure.
The Case of Electric Three-Wheelers
Despite their TCO advantage, electric three-wheelers may require further support to boost adoption. The high-speed segment faces challenges with higher upfront costs and the scarcity of affordable vehicle financing options.
Heavy Trucking Sector and EVs
The analysis also indicates that the heavy trucking sector’s shift towards EVs will become economically viable post-2030, with urban and regional light-duty commercial use already favouring electric options due to decreasing battery costs and the inefficiency of diesel trucks in urban traffic.
Barriers to Widespread Adoption
Despite the favourable TCO of EVs in most vehicle segments, the report identifies significant barriers to widespread adoption, including concerns over resale value, charging infrastructure, and accessible financing.
“Greater availability of robust after-sales infrastructure and services, an adequate charging network, and access to affordable vehicle finance are required,” the report concludes, urging focused interventions to address consumer hesitations and encourage a shift towards electric mobility in India.
Conclusion
The transition from ICE vehicles to EVs is inevitable, and the benefits are clear. But, for this transition to happen at a faster pace, a concerted effort from all stakeholders – government, manufacturers, and consumers, is required.
With time, there’s hope that EVs will not only become an environmentally sustainable choice but also an economically viable one for the masses.
