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No Win For Diesel ⛽

CHART OF THE WEEK 📈


The Story

You see people around calculating the benefits of a petrol car versus an electric vehicle, don't you? How EVs cost more than combustion engine cars, but then, the running cost of an EV is so much lower.


There was a time, long long ago - okay, just a decade ago, when people made that comparison between petrol and diesel cars. Cut to present-day, Indians aren't buying diesel cars any longer.


The share of diesel cars in India has gone down to <20%, from it being more than half the cars sold a decade ago.


In fact, now, some of the largest manufacturers of cars (like Maruti Suzuki) don't even make diesel cars any longer. This is from a time when Maruti had a diesel variant for almost all its models.


Why Is Diesel Not Sexy Anymore?


Price

  • The largest reason is the price! The government used to heavily subsidise diesel earlier. This was because diesel was more often used in industrial production, and in commercial vehicles.

  • A decade ago, diesel was cheaper than petrol by Rs. 24 per litre. And that’s when the price of petrol averaged Rs. 72 a litre. Essentially, diesel was available at a discount of 33%! And now, the gap between the two is a mere Rs. 7 per litre. At Rs. 96 a litre on petrol, that makes the discount on diesel a paltry 7%.

  • Even if diesel cars were available, they wouldn't provide the significant advantage that they would earlier.


Emissions

  • Diesel is more polluting than petrol. The lesser the refinement, the more emissions. Manufacturers, consumers, the government - everyone’s getting more conscious about the environment

  • With stricter emission norms, it just keeps getting more expensive for manufacturers to continue innovating and keeping carbon emissions under check, making it unviable to provide quality while maintaining costs

The Outlook

The huge disparity between the price of petrol and diesel, to the extent where one would debate between buying a petrol or diesel car is a thing of the past.


Clearly, the world has moved on, and we need to make fair judgements and calculations about EVs or petrol. Wondering if, over the next decade, the share of petrol cars will see a fate that’s similar to diesel cars!

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