Can hybrid cars help you save more than the EVs? | Mint

Can hybrid cars help you save more than the EVs?

To be sure, a hybrid car works on both a fuel engine and an electric motor.
To be sure, a hybrid car works on both a fuel engine and an electric motor.

Summary

  • Subsidies on EV reduce its upfront cost. There is no registration fee and road tax either

New Delhi: Sales of electric vehicles (EVs), particularly cars, in India is gathering momentum. Government data, as per the parivahan website, show that 73,000 EVs have been sold this calendar year so far. However, concerns linger about the range, or the distance these EVs can travel in one charge, limited charging infrastructure and expensive insurance. Amid these concerns, there has been a spurt in sales of hybrid cars, particularly in the last two months. But are hybrids economical, as compared to EVs?

To be sure, a hybrid car works on both a fuel engine and an electric motor. Those looking to go green get lower emissions, as with an electric car, and better fuel efficiency while not having to worry about the charging cycles of the vehicle. But here’s the catch. Strong hybrids in India currently start at about ex-showroom price of 17 lakh. In comparison, EVs come in affordable price ranges of below 15 lakh. MG Comet EV is the cheapest electric car in India starting at 7.98 lakh, ex-showroom price.

Hybrids come in three types—mild hybrid, plug-in and strong hybrid engines. In mild hybrids, the electric motor and the internal combustion engine (ICE) work together and the former gives a mild push to the latter. This means that the fuel engine does most of the work, resulting in lower efficiency. Take for example the Maruti Grand Vitara. The automatic mild hybrid variant offers a mileage of about 20 kmpl, as claimed by the company, while the strong hybrid variant promises a mileage of 27 kmpl. The mileage of a comparable petrol car from Maruti, say Brezza, is also about 20 kmpl, akin to a mild hybrid car.

A plug-in car has the option of charging the battery separately, which means these too come with a limited range like EVs. A strong hybrid car truly delivers better fuel efficiency with longer driving range. The battery in a hybrid car gets charged from the energy captured from various parts every time its brakes are applied.

Not only are hybrid car options expensive, their purchase price is higher compared to ICE cars in the same segment. While better fuel efficiency of hybrid cars will certainly reduce your fuel bills, is the saving worth the high upfront cost one has to pay over a fuel powered car? Mint did some number crunching to find out.

Time taken to recover extra cost

(Graphic: Mint)
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(Graphic: Mint)

To calculate the time taken by a hybrid car to recover the extra premium paid at the time of purchase, Mint compared the cost of ownership of a Toyota Urban Cruiser Hyryder V Hybrid and Hyundai Creta SX(O) Petrol Adventure Edition. The two cars are of the same segment and are top variants of their respective category with comparable features. However, one could have a few more features over the other as these are from different manufacturers.

You have to pay an extra 2.23 lakh to buy Hyryder Hybrid compared to Creta. Fuel savings cover this cost by the time the car covers roughly 87,600 km. At an average daily driving distance of 40 km (14,600 km annually), it will take about five years and 10 months to cover this distance (see graphic). We have assumed a 10% annual increase in the per litre rate of petrol. Thereafter, savings on the fuel expenses will be the car owner’s net savings. Typically, a car owner drives the same car for about eight years before switching to another car. So, in this example, after breaking even in the sixth year, the driver would have saved about 1.12 lakh in total on fuel bills before selling the car.

The number of years taken to recover the cost will change depending on the daily average commute of the user (see graphic). For instance, those travelling longer distances of about 2,000km per month (65km daily) will take about four years to offset the extra upfront cost. Whereas those with shorter daily average commute of 25km or less will take over eight years to recover the cost. Do note that most car manufacturers offer a warranty of eight years on the EV batteries. So, after you break even in eight years, it might be time to replace the battery, which currently costs about 15,000.

Since the running cost of hybrid cars recovers the extra purchase cost, net saving on fuel bills is possible only for those with higher average commute distances. People who mainly use a car for office commute and driving 30 km or less daily are better off buying an EV in the affordable range. Hybrid cars are better suited for those who travel intercity frequently and have higher daily commute average.

Are EVs more economical?

When the same numbers are run for an EV vs ICE counterpart, time taken to offset the extra cost is lesser in the case of EVs when compared to hybrid cars. This is due to mainly two reasons: EVs enjoy a host of subsidies from the central government aimed at promoting wider adoption and these save about 85-90% on fuel bills, while hybrid cars save about 30-40%.

Subsidies on EV reduces its upfront cost. For one, there is no registration fee and road tax on electric cars. Many state governments offer incentives over and above this on purchase of EVs. That’s not all. Even loans on EVs are incentivised as one can claim deduction of up to 1.5 lakh on interest paid on a loan taken to purchase an electric car. These benefits are not extended to hybrid cars, except in a few states like Haryana that offer some form of subsidies on hybrid vehicles too. In October, Reuters reported that Toyota Motor is lobbying the government to prune taxes on hybrid vehicles, arguing that these are far less polluting than petrol cars.

Electric cars also have lower maintenance costs as the battery is the only major component, which doesn’t require frequent maintenance. However, take note that the cost of replacing a battery of an electric car can be as high as 4 lakh–a cost that owners have to most likely incur after about 10 years of driving the car, as per industry experts. In the case of hybrid cars, maintenance costs are similar to ICE counterparts. Battery replacement cost is lower compared to EV as hybrid cars are powered by a 0.76kWh battery, while a mid-range electric car’s battery is 30-40 Kwh.

These factors keep the total ownership cost of EVs lower compared to hybrid cars over a period of eight years—the average time an owner keeps a car. However, if taxes are indeed cut on hybrid vehicles, just as EVs, the gap in purchase price with ICE models will reduce considerably and definitely make hybrids a preferred option over EVs. Currently, if one is to compare the purchase price of an EV with an ICE counterpart having comparable features, the difference is between 4 lakh and 5 lakh. However, pure hybrids cost only about 1-2.5 lakh more than a mild hybrid or petrol car. With reduced taxes, this extra cost will become negligible.

Hybrid cars are also a viable option for inter-city travel as the car runs on fuel engine at higher speeds on highways. However, the bigger challenge with strong hybrid cars is that all of them are premium models costing over 21 lakh (on-road price) and not suited to all budgets. EVs, on the other hand, come in affordable options too.

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