EV vs petrol: running-cost break-even on a ₹4 lakh premium

A sum you can redo with your own numbers

An electric car usually costs more to buy and less to run. Whether the lower running cost repays the higher price depends on three inputs you can check yourself: what you pay for petrol, what you pay for electricity, and how far you drive. This post does the sum with round, stated assumptions. Change any of them and the answer moves; that is the point.

Nothing here predicts fuel or power prices. The inputs are illustrations.

The assumptions

Cost per kilometre

• Petrol: ₹100 ÷ 15 = ₹6.67 a km
• EV at home: ₹8 ÷ 7 = ₹1.14 a km
• EV on public chargers: ₹18 ÷ 7 = ₹2.57 a km
• EV with a 70% home, 30% public mix: 0.7 × 1.14 + 0.3 × 2.57 = ₹1.57 a km

Even charging only at public points costs well under half of petrol per km on these inputs. The saving is large; the question is how long the premium takes to repay.

Break-even by distance driven

Using the 70/30 charging mix, the saving is ₹6.67 − ₹1.57 = about ₹5.10 a km.

Distance drives the result. A person who covers twice the km repays the premium in roughly half the time.

How much the charging mix matters

At 12,000 km a year:

Home access to charging matters, but less than distance does. The range between best and worst case is about two years.

The step most break-even sums skip

The ₹4 lakh premium is money that could have been doing something else. If it would have earned 7% a year somewhere safe, that is ₹28,000 a year of income given up. Subtract it from the saving, and the picture changes:

Counting what the money could have earned lengthens every break-even sharply, and at 8,000 km a year the premium would take about 31 years to repay, longer than the car lasts. The net figure for 8,000 km is ₹12,762 a year (₹40,762 − ₹28,000), and ₹4,00,000 ÷ ₹12,762 is about 31.

This is a rough method. It ignores compounding of the foregone return, which makes the true time longer still, and it ignores everything that favours the EV beyond fuel, such as lower servicing, which would shorten it. It is a way to see which inputs matter, not a verdict.

What the sums say about inputs

1. Distance is the biggest lever. The same car repays in 4 years or 10 years depending on the km.
2. The fuel price you assume matters. Redo the table with your local petrol price and your actual electricity tariff.
3. The price premium is the other big lever. Ask for the on-road price of both versions, since the gap is rarely the same as the ex-showroom gap. The on-road price calculator shows the line items.
4. The foregone return is real. If the premium is financed, the loan interest takes the place of the 7% and is usually higher.

Other things not counted

• Servicing, tyres and insurance differences
• Battery warranty and replacement cost after the warranty ends
• Resale value of each type after five or six years
• Charging access at home, in a building or at work
• Incentives, subsidies and road-tax differences that vary by state and change over time

For the wider question of buying a car at all, see buy now or save and buy later and the 20/4/10 rule.

All inputs are assumptions for illustration, not current prices. The result is arithmetic, not a recommendation to buy either type of car.