Why Budget-Friendly Electric Vehicle Is Still A Distant Dream For Indian Customers

Lithium-ion battery technology is the most expensive part of the EV and here with rising global sales and demand for EVs, lithium prices will remian high.

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Currently, the most affordable Electric Vehicle (EV) in India still costs well above Rupees 12 lakh and that brings a question as to whether India will ever see a Rupees 5-10 lakh EV. Is there a chance? No, is the answer in terms of short-term expectations and that lies with the concept of the electric car itself. There are huge hurdles which carmakers are facing with EVs in terms of maintaining the cost along with ensuring range plus performance.

Maruti gave up on its electric WagonR it showcased and instead has firmed up plans to bring its ground-up EVs but at a higher price. The truly affordable EV still eludes us. MG's affordable EV would be around Rupees 10 lakh expected while the same can be said for the upcoming Tiago EV. So, why is there a lack of EVs in the Rupees 5-10 lakh bracket with a decent range?

In the current scheme of things, to meet cost targets the carmaker will have to compromise on range and a claimed range of 150 at an affordable price point will mean consumers will not buy it due to range anxiety. While that aforementioned range can make sense with a large network of chargers, India is a vast market and the charging infrastructure will take time for that along with being not ready to serve a huge mass-market offering.

Lithium-ion battery technology is the most expensive part of the EV and here with rising global sales and demand for EVs, lithium prices will remian high. The only way to meet the cost target would be local production but even then the really affordable EV will not work.

Currently the Rupees 12-25 lakh market is ideal for EVs in terms of range or battery and below that, the economies of scale are not fit for that.

Given the fact that the mass-market buyer typically looks at a car below Rupees 10 lakh, the popularity of EVs depends on how the tech becomes affordable over the years. As of now, there is still a long time away before a true 'affordable' EV comes up.