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 believes battery will be lot cheaper over time as volumes increase-if you wish do the maths assuming replacement cost of 30k or 25k)
• Ather one subscription costs Rs 700+ GST from second year- Roughly Rs 800 per month (Note: Ather One is the all inclusive and most expensive subscription pack-covers data, OTA upgrade, service and even home electricity reimbursement) You can opt out of this or take a cheaper subscription package now- like data & service only etc)
• 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 in cash regularly 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 50-60 kms a day
-You're using it for about 40 kms 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
-Ather 450 is a much better scooter to drive than a petrol driven competition scooter, thanks to its low centre of gravity and better handling, connected and continuously improving system and a different kind of experience it offers. So if this excites you despite the economics you can get an Ather 450 purely for the experience it offers.

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

Latest: Notes from my interaction with Ather Management * Ather Chennai launch updates *