Electric cargo vehicles in India - Value for money?
Electric cargo vehicles are becoming increasingly popular for businesses looking to save money and reduce their environmental impact. Although EVs may have a higher upfront cost compared to traditional gasoline or diesel-powered vehicles, they typically have lower operating costs over their lifetime due to low operation and maintenance costs. The average business owner buying any commercial electric vehicle has to contend with rising fuel prices, decreasing fuel efficiency and increasing maintenance costs. There is definitely a change needed to break this vicious circle. Can the electric version be that option? The answer is an unhesitating yes!
The frequently rising fuel prices coupled with decreasing fuel efficiency and increasing maintenance costs has pushed many customers to consider the electric cargo version as an alternative. The government, too, is pushing hard to enable customers to transition from ICE (Internal Combustion Engine) vehicles to electric vehicles. However, in order to effect this transition, the customer needs to recognise the greater value for money that commercial vehicles promise.
What makes cargo EVs value for money?
Low cost of ownership : One of the main inhibitors while buying an electric cargo vehicle is the higher cost compared to an ICE vehicle. However, in order to understand how this is so misleading, one has to look at the TCO or the total cost of ownership. The TCO is derived by adding the cost of the vehicle and the cost of running and maintenance. While the price of the vehicle may be higher, the running and maintenance cost are far lower, making the electric vehicle the more attractive option. An EV cargo also has lesser components - making the maintenance that much easier.
On an average it costs Rs. 29,000 for Diesel 3 wheeler and Rs. 24,840 for the CNG auto as maintenance costs per year. ICE and CNG autos require complete engine overhauling twice in a 6 year cycle. Which means every 3 three years there is considerable spending on the upkeep of the vehicle.
On the other hand an EV cargo like the Altigreen neEV will need a change of battery in 5 years. The older battery can be recycled and repurchased by some agencies.
Fuel Cost: Electric three wheeler cargo vehicle are definitely a smarter choice mainly because of the considerable difference in the running cost that amounts to an increased earning of almost Rs 340 - Rs 350 a day as compared to the diesel and CNG three wheelers. While this cost differs from state to state, the variance is big enough to make a significant difference. Even as fuel prices across India range from Rs 80 to Rs 120 per litre (report from the Economic Times), the charging cost is significantly lesser. For e.g., depending on where you live, an electric vehicle with battery capacity between 20 - 40 kWh may cost between Rs 8 - Rs 10 per unit for charging. Running cost for ICE 3 wheelers is Rs 4.38 per km, whereas an EV like the Altigreen neEV, which has a running cost of around 0.92 paise per km (including maintenance), which translates into a difference of Rs 4 per km! This can bring in a lifetime savings of almost Rs.10 lakhs for the driver/ owner .
Govt Subsidies : The government of India launched the FAME scheme in 2015 to incentivize the adoption of EVs. The scheme provides financial incentives to buyers of EVs, as well as to manufacturers and suppliers of EV components. The government of India has also been working on increasing the number of charging stations for EVs across the country. As of January 2022, there were over 2,500 public charging stations for EVs in India, according to data from the Power Ministry.
In order to fulfil its commitments to the Paris Climate Accord, the Indian government has pushed a number of incentives to the consumers. This includes a reduction in the GST as well as subsidy grants to the consumer. Most of the Indian states also waive off the road tax too to encourage use of electric vehicles.
Financing Schemes : Financing schemes can be a helpful way to purchase an electric cargo vehicle (EV cargo) because they allow you to spread the cost of the vehicle over a longer period, making it more affordable to purchase. One can take a loan from banks to buy electric cargo vehicle. Be sure to compare interest rates and terms from different lenders to find the best deal. Leasing an electric cargo vehicle is an option that can allow you to get a new vehicle for a lower monthly payment than purchasing one. With a lease, you essentially rent the vehicle for a set period of time, after which you can either return the vehicle or buy it outright. Also, government incentives are available to help one buy an electric cargo vehicle. These can include tax credits, rebates, or grants that can help offset the cost of the vehicle.
Keeping the above points in mind, the financing schemes and plans available for buying an Altigreen neEV is a viable option, making it a complete value for money purchase. Below are the options available to finance the Altigreen electric three wheeler.
- Term loan - Banks provide a lump sum of cash upfront, in exchange for specific borrowing terms. Established small businesses with sound financial records can get a specified amount of cash, on a certain repayment schedule with a fixed or floating interest rate. (Term loans may require substantial down payments to reduce the EMI amounts and the total cost of the loan).
- Battery subscription - This plan provides batteries for Altigreen EVs on a subscription basis to reduce upfront costs for the individual/business.
- Leasing - An individual/business can use the Altigreen vehicle for a predetermined time period in exchange for the timely payment of rentals. (Leasing doesn’t give the individual/business any ownership over the vehicle).
- MUDRA loan - Avail the benefits of Pradha Mantri Mudra Yojana with government facilitated loans for small businesses.
As more countries implement low-emission laws and other policies to encourage the use of electric vehicles, EV cargos may become even more cost-effective for businesses. In short, the initial investment in an electric cargo vehicle can pay off in the long run, making them a great value for money. Globally, the electric vehicle market has been growing at an unprecedented rate. According to a report by TATA Capital, 4.19L EV units have been sold in 2022 in India alone. Commercial electric vehicles, particularly, variants like Altigreen’s three-wheeler cargo vehicles, are very versatile and can be used in multiple industries. There is little doubt that the next few years will see EVs edging out the fossil-fuel run vehicles in the cargo section at least.
