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Overview of Electric Vs Petrol Vs Diesel Car Ownership Costs

Team AckoFeb 16, 2024

Are you planning to buy a new car? If yes, is it going to be an electric, petrol or diesel car? It’s certainly challenging to figure out which type has the lowest ownership cost. Thus, to make your car-purchase journey easier, we have come up with a comprehensive comparison. Read on to learn more about electric vs petrol vs diesel car ownership costs.

Contents

Factors affecting the car ownership cost
Calculating the vehicle ownership cost
Ownership cost of an electric car
- Total ownership cost of an electric car for 5 years
Ownership cost of a petrol car
- Total ownership cost of a petrol car for 5 years
Ownership cost of a diesel car
- Total ownership cost of a diesel car for 5 years
Electric vs petrol vs diesel car ownership costs compared
Electric vs Petrol vs Diesel car: Which is the best option?
Frequently Asked Questions (FAQs)

Factors affecting the car ownership cost

Several factors influence a car's total ownership cost (TOC), irrespective of the fuel type. Be it an electric car or a petrol/diesel car; you have to account for several factors. In this section, let's take a look at the factors that determine the cost of ownership of a vehicle.

1. Vehicle price

It’s the upfront cost of the vehicle. In other words, it’s the amount you pay to the dealer for purchasing the car. It also includes the registration costs and additional costs related to the vehicle, such as accessories, extended warranty packages, etc.

2. Car insurance cost

It is the premium you pay to insure the vehicle. The new car insurance premium depends on the vehicle's price or value and the chosen coverage. The insurance cost also fluctuates as per the vehicle's age and overall mechanical condition.

3. Fuel price

It is the price you pay to purchase fuel for your car. For example, the cost of a litre of petrol/diesel or a unit of electricity (charging cost) is considered as the fuel price.

4. Maintenance cost

It is the money you spend on maintaining the car. It includes service costs, parts replacement costs and other miscellaneous costs related to vehicle maintenance.

5. Fuel efficiency

It is the distance travelled by the vehicle on a litre of fuel or a full charge in the case of electric cars. The fuel economy depends on various factors such as type of vehicle, engine capacity, driving style, driving environment and road conditions.

6. Driving distance

It is the total distance you drive in a day, month or year. The driving distance plays a significant role in determining the running cost. Because the more distance you drive, the more costs you incur.

Calculating the vehicle ownership cost

The overall ownership cost of a car can be calculated using the already-mentioned factors. To keep things simple, we will consider the approximate numbers for insurance, maintenance, and fuel costs. The vehicle we will consider for this calculation is the Tata Nexon compact SUV (Sports Utility Vehicle). The fact that it is available in petrol, diesel and electric variants makes it a comprehensive comparison. So, without further ado, let’s jump into the business end of this article.

Ownership cost of an electric car

To calculate the running cost of an electric car, let’s assume that you are purchasing the Tata Nexon EV Prime XM base variant. The following table will give you more clarity on the costs involved in the EV purchase.

Tata Nexon EV Prime XM variant on-road price	Rs. 16 lakhs
Car insurance cost	Rs. 65,000 (included in the on-road price)

Since the EVs are exempted from registration charges, you need not pay any registration fees during the vehicle purchase.

Once you have made the purchase, the next aspect to look for is the fuel price, driving range, charging cost and maintenance cost.

The Tata Nexon EV Prime delivers an ARAI-certified range of 312 km on a full charge.
Let’s assume that you drive a distance of 10,000 km per year.
For a full charge, the Nexon EV Prime consumes 20 units of electricity and let’s consider an average cost of Rs. 7 per unit of electricity.
Hence, the electric SUV will consume 641 (10,000x20/312) units of electricity to cover a distance of 10,000 km.
So, the total fuel cost (electricity cost) for the first year stands at Rs. 4,500 (641x7).
An electric car does not comprise complex mechanical components. Hence, the service and maintenance costs will be on the lower side.
Let’s assume the service/maintenance costs for the first year stands at Rs 3,000.
So, the EV ownership cost for the first year stands at Rs. 16,07,500 (16,00,000 + 4,500 + 3,000).

Here’s a table with the costs involved in EV ownership for five years.

Cost	1st Year	2nd Year	3rd Year	4th Year	5th Year	Total Cost for 5 years
Insurance cost	Rs. 65,000*	Rs. 62,000	Rs. 57,000	Rs. 53,000	Rs. 48,000	Rs. 2,20,000
Maintenance cost	Rs. 3,000	Rs. 5,000	Rs. 6,000	Rs. 8,000	Rs. 8,000	Rs. 30,000
Charging cost	Rs. 4,500	Rs. 4,500	Rs. 4,500	Rs. 4,500	Rs. 4,500	Rs. 22,500
Total Cost	Rs. 7,500	Rs. 71,500	Rs. 67,500	Rs. 65,500	Rs. 60,500	Rs. 2,72,500

*The 1st year insurance cost is included in the vehicle’s on-road price. Hence, we have excluded it from the above calculation.

Total ownership cost of an electric car for 5 years

We know all the costs incurred in 5 years of owning the Tata Nexon EV Prime. We need to add all the expenses to get the overall ownership cost.

TOC = On-road price + Insurance cost + Service/Maintenance cost + Charging cost

TOC = 16,00,000 + 2,20,000 + 30,000 + 22,500

Total Ownership Cost = Rs. 18,72,500

Ownership cost of a petrol car

For a fair comparison, let’s assume you purchase the Tata Nexon XE Petrol (base variant). We will consider similar factors such as the vehicle price, fuel, service, and insurance cost to calculate the running cost.

The on-road price of the Nexon XE stands at around Rs. 9 lakhs, and it includes the insurance (Rs. 40,000) and registration charges.
Let’s assume that you drive a distance of 10,000 km per year.
The petrol variant of the Nexon delivers an ARAI-certified fuel efficiency of 17 kmpl.
Hence, the vehicle consumes 590 litres (10,000/17) of fuel in a year.
Considering the average cost of petrol as Rs. 100 per litre, the fuel cost for the first year comes to Rs. 59,000 (590x100).
Next, the service and maintenance cost for a vehicle in this segment can be estimated at Rs. 9,000 for the first year.
Putting up all the costs, the ownership cost of the Nexon petrol for the first year stands at Rs. 9,68,000 (9,00,000 + 59,000 + 9,000).

The table below denotes the insurance, maintenance and fuel costs for five years.

Cost	1st Year	2nd Year	3rd Year	4th Year	5th Year	Total Cost for 5 years
Insurance cost	Rs. 40,000*	Rs. 36,000	Rs. 32,000	Rs. 28,000	Rs. 25,000	Rs. 1,21,000
Maintenance cost	Rs. 9,000	Rs. 10,000	Rs. 12,000	Rs. 14,000	Rs.16,000	Rs. 61,000
Fuel cost	Rs. 59,000	Rs. 59,600	Rs. 60,200	Rs. 60,800	Rs. 61,400	Rs. 3,01,000
Total Cost	Rs. 68,000	Rs. 1,05,600	Rs. 1,04,200	Rs. 1,02,800	Rs. 1,02,400	Rs. 4,83,000

*The 1st year insurance cost is included in the vehicle’s on-road price. Hence, we have excluded it from the above calculation.

Total ownership cost of a petrol car for 5 years

With all the costs available at our disposal, we can go ahead and calculate the ownership cost for five years by using the following method.

TOC = On-road price + Insurance cost + Service/Maintenance cost + Fuel cost

TOC = 9,00,000 + 1,21,000 + 61,000 + 3,01,000

Total Ownership Cost = Rs. 13,83,000

Ownership cost of a diesel car

Assuming you are buying the diesel avatar of the Tata Nexon (base variant), we will consider the same scenarios as the petrol car to calculate the total cost of ownership. The factors include the vehicle’s on-road price, fuel costs, service or maintenance costs and insurance costs.

The Tata Nexon XM Diesel (base variant) costs around Rs. 11.50 lakhs (on-road price). It also includes the insurance cost (Rs. 50,000) and registration charges.
The total distance driven in a year would be 10,000 km.
The diesel version of the Nexon delivers an ARAI-certified fuel efficiency of 21 kmpl.
That means the vehicle requires 480 litres (10,000/21) of diesel in a year to travel a distance of 10,000 km.
Let’s consider the average cost of diesel is Rs. 90 per litre. At this price, the total cost of diesel for the first year would be Rs. 43,500 (480x90).
For a diesel vehicle in this segment, the service/maintenance cost can come down to Rs. 10,000 for the first year.
Hence, the total ownership cost of a diesel car for the first year would be Rs. 12,03,500 (11,50,000 + 43,500 + 10,000).

You can refer to the following table for the costs incurred in owning a diesel vehicle for five years.

Cost	1st Year	2nd Year	3rd Year	4th Year	5th Year	Total Cost for 5 years
Insurance cost	Rs. 50,000*	Rs. 46,000	Rs. 42,000	Rs. 38,000	Rs. 35,000	Rs. 1,61,000
Maintenance cost	Rs. 10,000	Rs. 11,000	Rs. 13,000	Rs. 15,000	Rs.17,000	Rs. 66,000
Fuel cost	Rs. 43,500	Rs. 44,000	Rs. 45,000	Rs. 46,000	Rs. 47,000	Rs. 2,25,500
Total cost	Rs. 53,500	Rs. 1,01,000	Rs. 1,00,000	Rs. 99,000	Rs. 99,000	Rs. 4,52,500

*The 1st year insurance cost is included in the vehicle’s on-road price. Hence, we have excluded it from the above calculation.

Total ownership cost of a diesel car for 5 years

Now, let’s add up all the insured costs to get the total cost of ownership for five years.

TOC = On-road price + Insurance cost + Service/Maintenance cost + Fuel cost

TOC = 11,50,000 + 1,61,000 + 66,000 + 2,25,500

Total Ownership Cost = Rs. 16,02,500

Electric vs petrol vs diesel car ownership costs compared

TOC of an electric car (5 years)	Rs. 18,72,500
TOC of a petrol car (5 years)	Rs. 13,83,000
TOC of a diesel car (5 years)	Rs. 16,02,500

Note:

All the numbers mentioned in this article are approximate figures, which may vary from city to city.
The charging cost for an electric car accounts only for standard home charging.
The petrol/diesel fuel costs mentioned in this article account for fluctuation in fuel prices and vehicle fuel efficiency.

Electric vs Petrol vs Diesel car: Which is the best option?

There’s no concrete answer to this question, at least as of now. It all depends on your driving requirements, infrastructure availability and, more importantly, the budget you are willing to invest.

When you glance through the ownership costs of all fuel-type cars, you may notice that the electric variant has the highest TOC. But it only narrates half of the story. To understand the other half of the story, you can go through the following key takeaways from this article.

The higher purchase cost of an electric car leads to higher TOC in the first five years.
The overall ownership cost of an EV drops drastically the longer you own the vehicle. For instance, the TOC will be less after ten years of ownership.
The main reason for this is the efficiency of an EV remains the same (around 90%) and requires very little maintenance or service.
On the other hand, the efficiency of petrol/diesel vehicles drops drastically as the car gets older.
Plus, conventional fuel vehicles demand more care and maintenance as they get older. Hence, your maintenance costs will shoot up with each year of ownership.

We hope this gives you a fair idea about the ownership costs of electric, petrol and diesel cars. In simple words, an electric car makes sense if you intend to cover more distance and own the vehicle for a long period of time. On the other hand, if you are someone who keeps upgrading cars, conventional fuel vehicles make more sense. So, consider all these factors before buying your next car.

Frequently Asked Questions (FAQs)

Here are some of the common questions and their answers related to the ownership costs of electric, petrol and diesel cars.

Why are electric cars expensive to buy?

The main component of an electric car is the battery pack, which costs almost half the price of the vehicle itself. Plus, the complex EV technology makes electric cars more expensive than their conventional fuel counterparts.

Why does the cost of insurance decrease with each year of car ownership?

A car is a depreciating asset; its market value decreases each year. The car insurance premium depends on the age and value of the vehicle. Hence, the insurance premium decreases as the car gets older.

Why do electric cars have low maintenance costs?

EVs do not comprise mechanical components such as an engine, complex gearbox, fuel pump, fuel filters, etc. Hence, they only require basic maintenance for tyres, suspensions, brakes and axles.