The real economics of electric scooters like Ather 450

I’ve already written about Ather Energy 450 and 340 electric scooters- you can read about FAQs here and detailed experience and review here. In this post, let us take a look at the big question- do I save money if I buy an electric scooter say Ather 450 instead of say Honda Activa, which is the most popular scooter in India.

While doing the financials, we need to consider total cost of ownership- not just purchase price and running cost. There’re lots of variables- number of kms run, fuel price, potential maintenance expense, initial cost of purchase and so on. It is not possible to predict all of these with precision, hence we have to make some assumptions.

Scenario 1: Need a two wheeler, for 40 kms of use per day on an average, plan to use it as long as possible before scrapping/selling. Let us do the math for first 5 years, you can extend it for another 5 years if required (10 years is a reasonable time before a vehicle gets too old to be practical- of course some vehicles last 15 years + but let us not consider those extreme cases.)
Ather 450’s key expenses:
Ather demands an initial purchase price two times that of a Honda active. However, Ather pays back in saved fuel bills every week. But then, there’re some regular maintenance expense that we should factor- battery that needs replacement every 5 years, AtherOne subscription amount, Insurance and other expenses that pops up at regular intervals. Thus we need to factor this and set aside an amount every month for these expenses. This aspect is often ignored in advertisements or pro-EV articles, making them look lot cheaper than reality.

Ather’s running expense: 2.4 KWH (or 2.4 units) for 60 kms or about 12 rupees for 60 kms at 5 Rs per unit. (electricity unit charge is a function of which consumption slab you’re in). Charging is free initially if done at Ather Grid, but let us assume home charging for this illustration. Thus Ather 450’s running cost is about 20 paise per km

Other expenses prorated- 

  • Ather’s battery is expected to last about 5 years and replacement costs 40000- this translates into Rs 670 per month.
  • Ather one subscription costs Rs 700+ GST from second year- Roughly Rs 800 per month
  • Ather insurance premium is Rs 3600 per year or Rs 300 per month.
  • Some provision for expenses not covered under Ather One-tyre replacement etc- roughly Rs 130 per month
These add up to Rs 1900 per month from second year onwards, which is a significant amount. Note that you don't have to spend 1900 cash per month- it is prorated- some expenses are periodical
#
Factor
Ather 340
Ather 450
Honda Activa 5G DLX
Pulsar 200 NS ABS

1
On road Purchase Cost (A)
1.1 lakhs
1.25 lakhs
63000
1.25 lakhs

2
Monthly running expense
1200 kms (fuel/power) (B)
0 (if charged at Ather stations
Rs 200

Rs 240
2000 (1200 kms @50 kmpl, Rs 82 per litre)
2800
This will increase over time

Yearly (B1)
2400
2880
24000
33600

3
First Year Maintenance cost (C)
-
-
2000-3000
(free service)
3000-4000
(free services)

4
Long term maintenance cost (D)
8000 (Battery cost prorated)
8000
(Battery cost prorated)
-
-

5
Total Spend at end of 1st year (A+B1+C+D)
120400
136000
90000
163000

6
Year 2 running cost (F)
2500
3000
25000
35000
(assume 5% increase)
7
Year 2 insurance (G)
3500
3600
2000
3600

8
Ather One Subscription (H)
9600
9600
-
-

9
Long term maintenance cost (I)
8000 (Battery cost prorated)
8000
(Battery cost prorated)



10
Year 2 maintenance cost (J)


3000-4000
4000-5000

11
Year 2 total
(F+G+H+I+J)
23600
24200
31000
43600

12
Year 3 total
24000
25000
32000
45000

13
Year 4 total
24500
25500
33000
46000

14
Year 5 total
25000
26000
34000
47000

15
Year 1 to Year 5 total
217500
236700
220000
344600

Even after 5 years , Ather 450 doesn’t break even with Honda Activa. But again-equation may tilt in favor of Ather if fuel gets more expensive or Ather gets cheaper (AtherOne subscription or battery cost etc)

However, consider that you’re not planning to replace the battery, use your vehicle as long as you can and then dispose off. This saves 40000 Rs from above equation
Let us also assume you’re not going to avail Ather One subscription and manage without it- this saves another 48000, but assuming some maintenance worth 18000 will be required, this will save 30k
If you reduce 70k from Ather, below is how number looks like
16
5 year expense without AtherOne & battery replacement
147500
166700
220000
344600

Now the number looks highly favorable for Ather, but there will be near zero resale value and vehicle may not be usable beyond 5-6 years if you’re not replacing battery.

Further, above calculations assume 40kms of usage per day. Let us see the number, for just 20kms per day vs 60 kms per day
 17
5 year expense with AtherOne & battery change, 20 kms per day
210650
227640
156500
256100

 18
5 year expense with AtherOne & battery change, 60 kms per day
225000
245000
285000
420000

From above we see that for small usage (like 20 kms a day) Activa is highly economical overall- because its major expense component is fuel, which varies based on usage.  Running cost/Electricity bill is least of Ather’s expenses. Ather’s major expense component-battery cost, Ather One subscription etc are irrespective of usage, so costs almost the same even if usage is low.

But for heavy duty users- like 60kms per day- the difference is evident- fuel costs lot more. Ather will break even faster and will prove to be economical than Activa








  • Above article assumes a moderate increase in petrol price at 5% per year-it may increase 10% as well
  • Above calculation assumes a practical 50 kmpl fuel economy for activa- you can do the maths for vehicle and fuel economy you have in mind.
  • These numbers may change 2-3 years from now- if electric vehicles get good acceptance and popularity, per unit cost will go down, so vehicle and battery may get cheaper.
Final conclusions
Ather 450 is highly economical if
-You're using it 50-60kms a day
-You're using it for about 40kms per day only, but planning to manage without AtherOne and scrap the vehicle at the end of its life without buying new battery
-You prefer a greener electrical vehicle than polluting petrol scooter as long as total expenses are somewhat similar, if not super cheap

If the usage is too low- at around 20 km per day, Ather will take a long time to break-even with its petrol counter part under current market conditions. However, if money is not your single most consideration then you may still opt for Ather, as it is better for environment, doesn't require huge expenditure every month (Ather One annual/quarterly subscription available, battery expense once in 5-6 years etc)

Let me know what you think-would you consider an electric vehicle? Ather is a brilliantly made product- minimalist design, nice looks, lots of space, extremely light, almost noiseless operation, good suspension, comfort and fairly capable for city use. If you're thinking 50-50, I suggest go ahead and book.

Disclaimer: All the calculations are made with the information available with me at the time of composing this post. Some assumptions are also made and numbers often vary based on multiple factors and can't be predicted accurately. If you're not comfortable with these numbers pls do the math yourself. This post is for reference only- do your own due diligence before making actual purchase decision
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9 comments:

  1. Appreciate the detailed comparison provided here. Can see a lot of research has gone in making it as many details are considered without turning a bling eye to a single pointer.

    ReplyDelete
  2. I travel around 25KM per day. i am planning too buy spender plus. does my decission is good? or do you have any better idea? I travel 25 km daily and i leave in Hyderabad city.

    ReplyDelete
  3. Hi Ganesh
    If you are looking for a economic scooter in this petrol vs electric discussion, then okinOki Praise is a very good option to look into. With a practical range of ~ 130km per charge and a top speed of 65kmph, it definitely is a more practical buy considering life of a ungeared scooter could be around 30,000km at best.

    However a motorcycle may be a completely different. Luagage, speed, comfort etc.

    So do take point of comparíson and purchase wisely.

    ReplyDelete
    Replies
    1. Thans Praash for stepping in. Splender is half the cost of Ather and gives decent fuel economy. For a small usage like 25km per day, Splender would make more sense. Ather is not yet operational full scale in Hyderabad so you will have to wait a few months or an year to buy and user Ather there. For now go for Splendor

      Delete
  4. I am 16 which electric scooter is best for me sir

    ReplyDelete
    Replies
    1. It is not a function of age. It is a function of usage and budget- if you don't mind an additional 15-20k spend and want best one available, go for 450. If your usage is lesser and prefer to save a bit go for the cheaper one.

      Delete
  5. Which scooter (Electric or Petrol) will be better for me to travel 50kms daily ? I need it to go to my college. I was looking for 22motors 'Flow' but it isn't available in the market till now even after getting launched in Feb'18.

    ReplyDelete
    Replies
    1. Yours feels like a 50-50 situation... 50 kms a day is bordering the daily range of ather- what if you've to go another 10 kms and run out of charge? If there're charging facilities closeby and if you're fine with initial high cost and other expenses go for Ather, given the rate at which fuel price is increasing, electric vehicle might work out better for you.

      Delete

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