Friday, November 14, 2014

Electric Car Economics - India

8 lakh is the estimated price in Mumbai of, the Mahindra Reva e2o. The lithium ion battery (expected to be around Rs 2.5-3 lakh). Assume that an average person drives 10, 000 km a year. The e2o should cost Rs 50 per 100 km. That means a yearly running cost of Rs  5,000. The Wagon R (available at Rs. 5 lakh), at a conservative fuel efficiency of 10 km to a litre, and price of petrol at Rs  75 would have a running cost of Rs 75, 000. So  a customer would save Rs 70, 000 every year on fuel price. But a buyer of the e2o will take more than four years to recover the additional upfront money (Rs 3, 00, 000) and in the 5th year, the lithium ion battery needs replacement.

A reduction in lithium ion battery after 5 years could reduce the breakeven period. And people are expecting reduction also.

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