EESL : Lease cars , do not Buy !
Economic Times ( 16 Aug ) carries a report with following headline :
“ EESL Invites Global Bids for 10,000 E – cars “
Cars are for use by government departments in Delhi / NCR , and should be capable of running 150 Km on a single charge
In the first phase , 1000 cars will be purchased , at an estimated cost of Rs 12 lakh each
EESL has also floated tenders for 3000 AC charging points and 1000 DC ones , to be deployed by NTPC and PowerGrid , depending on the demand
Now , a recent CRISIL Research Study says , it is cheaper to “ rent a ride sharing taxi service “ ( like UBER / OLA ) , if you plan to drive less than 12,000 km / year
At 12,000 km / year , total cost ( fixed + variable ) per km works out to Rs 22 , for a self driven petrol car ( no salary of a chauffer )
It would be safe to assume that this would be Rs 25 / km for an Electric car
As against this , cost of hailing a UBER / OLA works out to Rs 19 / km !
A personal car is cheaper only if the distance driven is more than 15,000 km annually ,” ratings agency Crisil said.
“And with a chauffeur, that distance doubles to 30,000 km,” it said.
I believe :
- ALL government departmental cars are driver driven
- Run ( max ) of 100 km per day ( 20,000 km in 200 working days )
Then , why “ Buy “ these 10,000 cars for an Capital Cost of Rs 1,200 Crores ?
Why not float a “ Global Tender “ for leasing out ? And save that Rs 1,200 Crores ?
Apart from UBER / OLA , I am sure a large number of Start Ups will come forward with offers cheaper than Rs 15 / Km !
And expect offers from Mahindra & Mahindra along with offers from most Indian ( – and quite a few , foreign ) car manufacturers , as well !
What’s more , no need to worry about setting up those charging stations or drivers going on leave ( or strike ! )
I believe , between the Central and the State governments , current fleet of passenger cars is about 3,000,000 ( 3 million / 30 lakhs )
That would require a Capital investment of Rs 3.6 LAKH*CRORE , if replaced ( by purchasing ) , by electric cars !
All this when a typical “ Owned “ car is hardly used for 3 hours ( 12 % ) per day !
Apart from savings in Capital Cost , consider the following :
- Saving / km = Rs 10 ( Rs 25 for owned E-Car less Rs 15 for rented UBER / OLA )
- So , for 20,000 km / year , that would be Rs 2 lakh per car per year
- That is Rs 200 Crore / year for 10,000 cars !
When the entire World is moving towards a “ Economy based on Sharing of Under-Utilized Assets “ , for improving “ Asset Utilization “ , it does not make sense to BUY cars
A capital-starved , poor country must try to use all its “ assets “ , round the clock
Just one example : All buildings that are currently occupied / used , only for 10 / 12 hours , can be used ( may be ) for 20 hours per day !
I urge Shri Saurabh Kumar ( MD – EESL ) to consider my suggestion of leasing
He may also want to include following condition in “ E Car Leasing Tender “ :
“ Tenderer shall offer a 5 year lease , with a minimum of 10 % REDUCTION in the per km lease rental , each year over the rental for the preceding year “
- As per following report of Investment Bank UBS , E car prices in 2018, drop below the prices for petrol cars ! This trend ( of prices dropping for E Cars ) will continue for foreseeable future
- If leased , that savings of Rs 200 crore / year mentioned earlier , will keep increasing , year after year !
Shri Saurabh Kumar will find whole-hearted support from Shri Nitin Gadkariji / Shri Piyush Goyalji
17 Aug 2017
www.hemenparekh.in / blohgs