The world is changing and ever-evolving. Climate change has provoked severe temperatures and environmental changes, impacting all living creatures. To limit the carbon emissions into the atmosphere there are some changes taking place and governments are implementing some policies regarding it.
One of the changes is that electric vehicles will replace ICE in the future to reduce emissions. The transition is not easy due to various factors such as technology, reliability, range, and adaptability are some of them. In this article, we will look at whether Electric Vehicles are the Future or deception.
Benefits to the Ecosystem and Environment
Electric vehicles produce zero direct emissions and eliminate particulate matter, nitrogen oxides, and carbon monoxide. This significantly reduces air pollution and greenhouse gas emissions, improving air quality and mitigating climate change. Electric Vehicles help create cleaner, healthier environments for communities.
It requires fewer natural resources compared to conventional vehicles. They have simpler mechanics and use less harmful fluids like motor oil. Additionally, Electric Vehicle batteries can be recycled, reducing waste and the need for new resource extraction. This promotes sustainable use of resources and protects ecosystems.
Note: If you want to learn Candlesticks and Chart Trading from Scratch, here’s the best book available on Amazon! Get the book now!
EVs operate much more quietly than internal combustion engine vehicles. This reduced noise pollution positively impacts urban areas, residential neighborhoods, and natural environments. Quieter transportation contributes to a more peaceful quality of life and helps preserve the tranquility of sensitive ecological areas.
Raw Material Cost fluctuation impact
The raw materials cost for electric vehicles has surged significantly in recent years, impacting manufacturing. Between March 2020 and May 2022 worldwide, the average raw material cost for an Electric Vehicle increased by 144%, reaching $8,255 per vehicle. This price rise is majorly due to materials and battery components like cobalt, lithium, and nickel prices.
Even in India, recently automakers have raised Electric Vehicle prices to offset rising prices. Companies like Tata Motors have implemented price hikes recently. These adjustments reflect the higher costs of parts which might affect consumer affordability and slower EV adoption.
The raw material price fluctuation might create uncertainty in the EV market. Especially, Lithium which is one of the main raw materials for the battery has dropped significantly in the global market recently from $80/kt to $13/kt due to increased supply, overall the EV cost of production remains high and might reduce in the future. Automakers may prioritize profitability over rapid expansion, potentially limiting the availability of affordable EV options for consumers
Industry Overview and outlook Of Electric vehicle
The demand for electric micro-mobility vehicles, especially two-wheelers and three-wheelers, is growing in India. Indians prefer these vehicles because they’re cheaper and better suited for the country’s crowded roads.
India wants to increase electric vehicle sales by 2030. The government aims for 30% of private cars, 70% of commercial vehicles, 40% of buses, and 80% of two-wheelers and three-wheelers to be electric. This goal means having 80 million EVs on Indian roads by 2030. India also plans to make all these EVs domestically through its ‘Make in India’ program.
Experts predict the Indian EV market will grow from $3.21 billion in 2022 to $113.99 billion by 2029.
They expect India to become the world’s largest EV market by 2030, with more investments coming in the next 8-10 years. The EV battery market in India will also expand, from $16.77 billion in 2023 to $27.70 billion by 2028.
The lower cost and better suitability of electric two-wheelers and three-wheelers for Indian roads will likely boost their adoption in the coming years. EVs sold in FY24 were around 16,75,800 units which increased by 42% YoY from 11,83,418 units in FY23. Most of the sales are from two-wheelers which contribute most of the Electric Vehicle sales after three-wheeler vehicles.
Cost per kilometer comparison
Electric vehicles generally offer a lower cost per kilometer compared to internal combustion engine vehicles. For instance, operating an EV can cost around one-tenth of the expense associated with conventional vehicles. The significant difference arises from lower energy costs and low maintenance for EVs.
Charging an Electric Vehicle typically costs less than an ICE fueling vehicle. For example, as per NASSCOM, the cost per kilometer for an ICE vehicle is around 3.10 over 10 years whereas for EV it operates at around Rs. 1.24 per km. Charging in Homes further reduces expenses which makes EVs more efficient and economical for daily use.
EVs also benefit from lower maintenance costs due to fewer moving parts compared to ICE vehicles. This reduced complexity leads to savings in repairs and servicing. As a result, the overall cost per kilometer for EVs remains competitive, making them a better option for budget-conscious consumers.
Resale value comparison
Electric vehicles face greater resale value challenges compared to internal combustion engine vehicles. A study found that EVs lose nearly 50% in the first 5 years, compared to the average vehicle loss of 39%. Concerns over battery life and replacement costs impact EV resale values.
Rapid advancements in EV technology lead to the anticipation of newer, better models, driving down the outgoing model’s price. As EV technology evolves, resale values are expected to improve. Consumer attitudes towards EVs also play a significant role in resale values.
Also read…
Electric Vehicle Advantages
Most of the EVs significantly reduce greenhouse gas emissions compared to traditional internal combustion engine vehicles. By producing zero tailpipe emissions, EVs help improve air quality and might help to improve climate change. Their renewable energy sources use might further enhance their positive impact on the environment, promoting a cleaner, healthier planet.
Owning an EV can lead to substantial cost savings over time. Lower fuel costs, due to cheaper electricity rates compared to gasoline, make EVs more economical to operate. Additionally, reduced maintenance requirements, such as fewer moving parts and no oil changes, contribute to long-term financial benefits for EV owners.
They offer an enjoyable and unique driving experience. EVs provide instant acceleration or torque, resulting in a responsive and quiet ride. Many models come equipped with advanced technology features and smart connectivity options, making driving more convenient. It is enjoyable for users while improving overall safety on the road.
Electric Vehicle Adoption Challenges
One major challenge to electric vehicle adoption is the high upfront cost. EVs typically have a higher purchase price than internal combustion engine vehicles due to expensive battery technology. Although operating costs are lower, most consumers hesitate to invest in an Electric Vehicle because of the initial financial burden.
The lack of widespread charging infrastructure also hampers EV adoption. Most of the potential buyers worry about finding charging stations, leading to “range anxiety.” Even reliability concerns on the Indian roads compared to ICE vehicles remain an issue. Recently, the flames from EVs have dampened the buying interest and have promoted negative publicity on reliability.
Governments across the world are investing in expanding charging networks. The current availability often falls short, especially in rural areas, making it difficult for people to consider switching to Electric vehicles.
Consumer awareness about electric vehicles remains low, further complicating adoption efforts. Many people do not understand the benefits of EVs or how they work. Educational initiatives and outreach programs are essential to inform potential buyers about the advantages of EVs, including lower operating costs and environmental benefits, which might improve publicity and promote widespread acceptance.
Conclusion
As we near the conclusion of the article, we looked at how Electric vehicles are making inroads into the automobile sector. They have their advantages as well its implementation challenges. Over the period technological advancements and better research on EV efficiency might improve in the upcoming years.
Improvement of public infrastructure especially with chargers, battery swapping technology to any vehicles, and range improvement can positively revolutionise the sector. However, the raw materials included in the EVs are mined which further causes environmental hazards and the use of simpler methods can benefit the industry as a whole. What do you think about Electric vehicle’s future? Whether it is a scam or a misguided future? Let us know your views in the comments section below.
Written by Santhosh
By utilizing the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks, also get updated with stock market news, and make well-informed investments.
Start Your Stock Market Journey Today!
Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!
