Pre-owned EVs will offer enticing value: Tata Motors EV chief

    Reduced sticker price and low running costs of used EVs will minimise cost of ownership; long warranty period will further allay concerns about battery health.

    Published On Sep 24, 2021 07:30:00 AM

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    Pre-owned EVs will offer enticing value: Tata Motors EV chief

    Electric vehicles have slowly started gaining traction in the Indian mass market segment. Appreciated for their low running costs, especially in this era of sky-rocketing fuel prices and zero tailpipe emissions, EVs have garnered a lot of attention. Still, the higher purchase price of a brand new EV can be a deal breaker for many and this is where the used car market can offer an enticing compromise, believe experts. "The first owner [of an electric car] may have to wait for a longer period to recover his [higher] investment, but for the second or the third user, it becomes that much more favourable," said Anand Kulkarni, Product Line Director – EV and ALFA architecture, Tata Motors, at the EV Forum organised by our sister publication Autocar Professional.

    • EVs have a low running cost compared to combustion vehicles
    • Used car market further brings down purchase cost of EVs
    • Electric car batteries can retain performance for many years

    Depreciation can lower the entry barrier for buying an EV

    “The acquisition cost of an EV is 25-30 percent more than a comparable ICE (internal combustion engine) vehicle,” commented the senior Tata executive. However, depreciation in the value of an EV, similar to that of any other conventional vehicle, can help turn the value equation around.

    “In the first year, the depreciation is huge – around 20-25 percent. The electric car, then, starts to become valuable to the second user because the cost per kilometre is already one-sixth to one-seventh of a petrol or diesel vehicle and one-third to half of a CNG vehicle,” elaborated Kulkarni. Our extensive road test of the Tata Nexon EV also yielded similar results and showed that with a real world range of about 208 km, charging and running the electric SUV costs roughly Rs 1.2-1.5 per km, which is a fraction of what owners would pay for driving its ICE counterpart.

    “So undoubtedly, the EV is cheaper,” said Kulkarni. As such, picking a used EV over a similarly priced new combustion vehicle spells out to be a better value proposition. 

    With electrification a fairly new phenomenon, and not many EVs on the road, Kulkarni admitted that determining the resale value of an electric vehicle is currently a challenge. However, he added, “In my opinion, the initial fluctuation in the residual value [of EVs] will soon give way as more electric vehicles become available in the market and people discover the value of the car.”

    Still, the health of the battery of a pre-owned EV could be a sticking point for some buyers.

    Extensive battery warranty periods to help build confidence

    Experience with smartphones has made us all wary of battery degradation with time and similar parallels can be drawn for EVs. “There are fears about the battery and having to replace the entire battery pack. But almost everyone is giving an 8 year/1,60,000km battery warranty, which is here to stay,” commented Kulkarni.

    All electric cars currently on sale in India, right from the Tata Tigor EV to the Audi e-tron GT, get an 8 year/1,60,000km warranty for their battery packs as standard. Within that timeframe then, prospective buyers of used EVs can be assured of satisfactory performance.

    However more than time, it’s the battery charge – discharge cycles that have a bigger effect on life and battery performance and here Chetan Maini, co-founder and Vice Chairman of Sun Mobility, says most private EVs will not have a concern as they will go through far fewer charge-discharge cycles, thus prolonging the battery life. Typically, battery performance begins to drop only after about 500 charge cycles. While a commercial EV would see this rather quickly, a private car could see 500 cycles over a 10-year period, assuming it is city-bound and would manage on a single charge per week.

    Also see:

    India's state EV policies: how do they compare?

    Electric cars, SUVs currently on sale in India in 2021

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