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Electric Cars

There’s no real mystery behind these new cars and their costs. The fact is that they are extremely efficient, and their mechanics are much simpler. Electric motors are much less expensive and far easier to work with than petrol engines. They are also comparatively simple in terms of service requirements. Parts can be easily replaced, rather than repaired.

The on-road economics are getting pretty interesting, too. China’s Alpha Lujo is being quoted as being able to operate for $3 a day, and India’s ultra-cheap Tata cars are looking like producing similar results. These dollar figures for running costs are likely to be category killers. For the price of a few litres of fuel, the basic operating parameters are an 80-120kmh speed and a 100-120km range. Overall, the top speed of other comparable cars is steadily becoming much higher, and better batteries are rapidly improving the range factor.

These parameters have another dimension. That 80kmh is roughly the best case urban speed, and the 100km range is more than typical urban car usage per day. When you bear in mind that these cars can be recharged using a power point, and that current cars can do quick recharges in about 20-40 minutes, they are looking pretty good.

Electric cars can be mass produced more quickly than conventional cars, without the heavy engine blocks and the petrol-related technology. That means that their cost at distribution point is also lower. The Alpha Lujo 5 seater sedan is expected to get on the road for around $25,000. Those costs are likely to be too much for petrol powered cars, which even now are facing increased costs as well as a market which isn’t thrilled by on-road costs or the big dollar costs of 4WDs and even basic sedans.

The car manufacturers have taken the pragmatic approach. The economics are all in favor of these cars, and in practice moving to lower production cost bases is very much in their favor. The added costs which have been hitting their sales have also been entrenched in production costs, which reduces the real value of unit sales.