In the quest to reduce the nation’s dependency on fossil fuels, Union Road Transport Minister Nitin Gadkari has been a vocal advocate for electric vehicles (EVs) in India. However, despite the fervent push towards sustainable transportation, the EV market has not witnessed the rapid growth anticipated. The reluctance among consumers primarily stems from concerns about high electric car prices and limited driving ranges.
The Tata Electric Surge:
Currently, Tata Motors leads the charge in the Indian EV market. The company’s electric version of the popular compact SUV, Nexon, has gained significant traction. Tata has also electrified other successful models like the Tiago, establishing itself as a key player in the electric vehicle segment.
A Global Cost Parity Projection:
Recently, the prestigious Rocky Mountain Institute released a research paper, suggesting that by 2024, electric cars’ cost in Europe will align with that of petrol and diesel counterparts. A similar scenario is expected in the United States by 2023. The report envisions this trend going global by 2030, indicating that within five to seven years, the cost of electric cars in India and worldwide will match that of petrol cars. The institute predicts that by 2030, two out of every three cars sold globally will be electric.
The Key to Cost Reduction: Batteries:
Approximately 40 percent of an electric car’s total cost is attributed to the battery. Consequently, a significant reduction in battery cost could trigger a global electric car revolution. For instance, Tata Motors’ Nexon EV, priced between 14.74 lakhs and 19.94 lakhs INR, has a 30.2 kWh battery capable of covering up to 325 km on a single charge. If battery costs were halved, as projected in the report, the Nexon EV’s battery, currently worth around six lakhs, would drop to approximately three lakhs. However, the cost of preparing the car’s structure, valued at around nine lakhs, would remain relatively unaffected. This reduction in battery price could potentially lower the Nexon EV’s cost to around 12 lakhs, making it more accessible to a broader consumer base.
The Future of Affordable Electric Vehicles:
While the Nexon EV stands as a remarkable compact SUV, the cost distribution between the battery and the car’s body may differ significantly for entry-level electric cars like the Alto. If a Nexon-sized battery were to be integrated into an Alto, the resulting EV could potentially be priced similarly to its petrol-powered counterpart. This suggests that in the near future, consumers could enjoy the benefits of electric mobility at the price point of traditional petrol vehicles.
