AN EV'S P & L

DO YOU SAVE OR LOSE MONEY ON AN EV?

- TUHIN GUHA

Whichever side of the argument you find yourself on, there’s no denying that electric vehicles are here to stay. Although hydrogen fuel cell vehicles may seem like the ideal replacement for our combustion-engined cars, the technologies and processes currently don’t exist to make or dispense hydrogen as cost-effectively as fossil fuels. For numerous reasons, EVs have seen the investment and legislative attention needed globally and in India to start making them viable, up to a degree where they seem the only option if you can’t or don’t want to use a combustion-engined vehicle anymore.

Upfront costs

A big disadvantage that EVs face, especially in a value-driven market such as India, is their high initial costs. Electric cars are much simpler than combustion-engined ones in their construction - usually built around a fairly straightforward ‘skateboard’ architecture. But adapting currently available battery technology to this application has been a challenge. The present industry-standard lithium-ion technology has been around in laptops and phones for a while but nowhere near in the sizes or usage cycles that are needed in an EV. Another challenge is the absence of a readily available global supply chain for the rare earth metals these batteries need, lithium, nickel and cobalt, on the scale needed for higher proliferation of BEVs.

This relative shortfall isn’t surprising with the roughly 100 years of infrastructure building that combustion-engined cars have on their side. But to the credit of EV manufacturers, the rate of progress has been significantly quicker than with combustion-engined cars, both in terms of the energy density of batteries as well as battery costs. Reports suggest that the cost of manufacturing a lithium-ion battery has dropped by 98 per cent since 1990 and by 50 per cent just from 2016.