Unlike a petrol or diesel vehicle that runs on an internal combustion engine (ICE), an electric vehicle or EV runs on electricity stored in its rechargeable batteries. EVs neither cause emissions or pollution nor do they contribute to the depletion of natural resources. However, their carbon footprint is not zero as the generation of electricity does leave a sizeable footprint.
Today, most countries including India, view EVs as a sustainable alternative to ICE vehicles. In an attempt to boost the popularity of EVs, the Indian government is offering incentives to both EV manufacturers and buyers. In addition, it is also setting up charging infrastructure across the country to support these vehicles. If you are planning to buy an EV then make sure you protect it with robust
car insurance or
scooter insurance. But, before we get into why you must buy insurance along with the vehicle, let us look at the reasons to buy an EV.
Why should you buy an EV?
Some of the reasons why you should consider buying an EV instead of an ICE vehicle are:
Running costs
Charging an EV battery is much cheaper than refuelling a car with petrol or diesel. Considering fuel prices as of 2021, an EV costs Re 1 per km, petrol cars cost Rs 9 per km, and diesel cars cost Rs 6 per km. Meanwhile, CNG vehicles run at Rs 2.5 per km.
Maintenance costs
Maintenance of an EV is easier as it has far fewer serviceable parts. In petrol and diesel cars, the higher numbers of movable parts increases the need for regular servicing, thus increasing the cost of maintenance. The premium for
car insurance and
scooter insurance for EVs is transparent and calculated on the battery type and power of the EV.
Self-generated fuel
As an EV runs on electricity, you can install solar panels and generate the power yourself. This will lower the already negligible fuel cost further. Needless to say, petrol and diesel are scarce and exhaustible natural resources. However, check with your
car insurance or
scooter insurance provider if the policy covers solar panels.
Emissions
There are no tailpipe emissions from an EV. By choosing an EV you are putting the onus of pollution control on the policymakers and electricity-generating companies. As the power generation sector gradually phases out fossil fuels, vehicular pollution can be minimised drastically.
Ease and convenience
Driving an EV is easier and more comfortable thanks to its simpler controls. You just need to control the acceleration, brakes, and steering wheel. In absence of combustion, EVs are remarkably silent as well. Besides, instead of queuing up at fuel stations, you can charge it from the comfort of your home.
Besides, there are various incentives for the ownership of EVs. For instance, there is a 15% discount on the
car insurance premium of an EV. This is available for
scooter insurance as well. A major financial benefit of buying an EV is the tax benefits offered by the Central and state governments of India.
Add to your financial benefits by opting for comprehensive
car insurance and
scooter insurance as it will cover damages to your vehicle in case of a road mishap.
Tax benefits of owning an EV
Section 80EEB of the Income Tax Act provides an income tax deduction for owning an EV. The benefit is available only for individuals and not for any other legal entities such as a company, firm, HUF etc.
Accordingly, if a person buys an EV through a vehicle loan, a deduction is available for the interest paid on such a loan. Deduction for interest payments of up to Rs 1,50,000 can be claimed under this section. The EV may be bought by the individual for personal or business use. If used for business use, the interest paid over and above Rs 1.5 lakh can be shown as business expenses.
To claim this deduction, the individual should retain a copy of the interest certificate, car loan documents and tax invoice. The car loan must be taken to specifically buy an electric vehicle. Only vehicle loans taken from a financial institution or non-banking financial company are eligible for this benefit. Presently, the deduction is available for loans sanctioned during the period between 1 April 2019 and 31 March 2023.
This deduction can be availed of by electric cars as well as two-wheeler owners.
Non-tax benefits of owning an EV
The Faster Adoption and Manufacturing of (Hybrid and) Electric vehicles scheme (FAME) offers incentives for purchasing an EV. This national scheme offers:
Two-wheelers - An incentive of Rs 15,000 per kWh subject to a maximum of 40% of the cost of the two-wheeler
Three-wheelers and four-wheelers – Rs 10,000 per kWh
E-buses and e-trucks – Rs 20,000 per kWh
The scheme also defines the approximate size of the EV battery in each case.
In addition, state governments offer incentives for the purchase and/or manufacturing of EVs.
With all the financial and environmental benefits that it brings, EVs are poised to become the vehicle of choice for the present as well as future vehicle owners. Make sure to protect your EV with solid comprehensive
car insurance or
scooter insurance.
