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When to Choose an Electric Vehicle (EV) vs. a Conventional Petrol/Diesel Vehicle: An Analytical Approach

Calculators.club team

March 18, 2025·8 min read

Deciding whether an electric vehicle (EV) or a traditional petrol/diesel vehicle suits your needs requires careful analysis beyond the initial price tag. Here's a deep-dive, analytics-driven guide to help you make an informed decision:

1. Upfront Cost vs. Long-Term Savings

EVs often have a higher initial purchase price compared to petrol or diesel vehicles. However, operational costs, including fuel and maintenance, can significantly shift the economic advantage over the vehicle's lifetime.

Maintenance Cost Advantage:

• Globally, EV maintenance costs are about 40-60% lower than petrol/diesel vehicles due to fewer moving parts.
• In India, this advantage is even stronger, with EV maintenance costs around 50-75% lower.

Fuel Savings:

• EVs use electricity instead of fuel, and typically cost around 70-80% less per kilometer to run, particularly in regions with affordable electricity.

2. Fuel Price Trends and Implications

Fuel prices fluctuate significantly, but historical data reveals clear trends:

• Globally, petrol/diesel prices have increased by an average of 3-5% annually over the past decade.
• In India, petrol prices rose around 3-5% annually, while diesel prices rose by 5-6% annually, significantly impacting long-term cost analysis.

Higher future fuel prices could amplify the benefits of choosing an EV today.

3. Resale Value and Depreciation

Depreciation rates for EVs historically were higher due to battery longevity concerns but are improving rapidly:

• EV Resale Value: Typically retains about 45-60% of value after five years globally, and 40-50% in India.
• Petrol/Diesel Resale Value: Typically retains around 50-65% of value after five years.

The gap is narrowing as EV technology matures and consumer confidence grows.

4. Battery Efficiency and Degradation

Battery degradation is a primary factor influencing the EV's long-term viability:

• Average battery degradation ranges from 2-3% per year, with total capacity typically remaining above 85% after 5 years.
• Efficiency reduction due to battery wear averages an additional 1-2% increased energy consumption per year.

This minor efficiency loss usually does not offset significant fuel savings.

5. Environmental Impact and Policy Incentives

• EVs significantly reduce carbon footprints, and governments globally offer incentives, subsidies, and tax rebates, further improving financial viability.
• Conventional vehicles face tightening emission regulations and higher future taxes.

When Does Choosing an EV Make Sense?

• If you drive extensively: EVs excel in high-mileage scenarios due to their low running costs.
• In areas with rising fuel costs and reliable electricity: An EV's operational savings multiply over time.
• If government incentives exist: Subsidies can offset initial EV purchase costs substantially.

When Does a Petrol/Diesel Vehicle Still Make Sense?

• Limited daily usage: Low annual mileage (<5,000 km) reduces EV's cost-saving advantages.
• Regions with unstable electricity supply or infrastructure limitations: Charging convenience matters significantly.

Conclusion

Choosing between an EV and a petrol/diesel vehicle depends significantly on your driving habits, local fuel and electricity prices, resale value expectations, and policy incentives. While EVs generally offer substantial long-term financial and environmental benefits, conventional vehicles might still be viable under certain circumstances. Conducting an individual financial analysis with these factors in mind is crucial before making your choice.