And thus, due to this high differential, we expect that capital subsidy would still be needed to make electric buses
viable compared to conventional buses by FY24, which in turn may limit its penetration largely to the public
transport (STU-State transport undertaking) segment.

TCO period (years) 8 10 12 TCO period (years) 8 10 12

Diesel 20.3 192 18.1 Diesel 239 «224 = 209
CNG 16.7 158 149 CNG 193 181 169
Electric 33.7 329 310 Electric 340 33.2 0314

Note: Numbers denote total cost of ownership in Rs per km, TCO period units in years

HCV

Due to higher battery cost, initial cost of an electric truck can be 5-6 times higher than a diesel one. As a result of
this, there is a differential of Rs. >1 Crore in ownership cost between diesel and electric trucks at present.

As the lead distances and GVW (gross vehicle weight) of heavy commercial vehicles (HCVs) are fairly higher
than ICVs and MCVs, they require a large battery. This makes electric HCVs prohibitively pricey.

In addition to excessively high battery costs, the incremental weight of these batteries further decreases the
payload capacity of HCVs. Due to these factors, adoption of EVs in the HCV segment is expected to be fairly low
over the next five years.

Thus due to prohibitively high initial costs resulting in a considerably higher total cost of ownership, adoption of
EVs in HCV may be near negligible levels even by FY24.

 

20

 

TCO period (years) 4 6 8 TCO period (years) 4 6 8

Diesel 30.7 276 © 25.7 Diesel 36.2 321 29.7
LNG 33.1 29.2 © 273 LNG 35.7 304 29.2
Electric 40.4 364 32.4 Electric 405 369 331

Note: Numbers denote total cost of ownership in Rs per km, TCO period units in years

Electric Vehicles Forecast

LCV Goods - Electric

Ex jf

9,000 - 11,000

556
7 18

Fy19 FY20 FY24

m=LCV Goods @ EV Penetration

Source: CRISIL Research
Note: N.M = Not meaningful

Currently, most EVs used in the commercial segment as goods carries are three-wheelers. However, as the cost
differential between electric and diesel vehicles start reducing, CRISIL Research expect new models to be
launched, which will drive sales in the segment as the third-mile logistics and local distribution of goods are well
suited applications for electric vehicles.

Consequently, EV sales in the LCV goods segment can rise to 9,000-11,000 vehicles by fiscal 2024, which would

be about 1-3% of the total light commercial goods vehicle market as CNG offers better total cost of ownership in
the near future and be preferred over electric variants.

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