Mahindra Reva has slashed prices of the E2O electric car by nearly 1.7 lakh rupees, albeit with an accompanying rider. While the Reva E2O’s price in Delhi is now 4.99 lakh rupees, buyers who opt for this price tag will have to pay a monthly battery rental fee of 2,599 rupees each month towards the lithium ion battery rental of the car.
In other words, Mahindra Reva owns the batteries of the E2O electric car and is now renting this battery out for a monthly sum of 2,599 rupees. Of course, the E2O buyer still pays the electricity bills that accrue for charging the E2O’s lithium ion batteries for day-to-day running.
These monthly installments will run for 60 months/5 years and eventually, the E2O buyer will end up paying about 1.56 lakh rupees to Mahindra Reva over a period of 5 years. This is assuming that the E2O is run 800 kilometers a month/50,000 kilometers in 5 years. Notably, the battery change interval for the E2O is 50,000 kilometers.
Mahindra Reva’s marketing trick deconstructed
Consider this situation. You buy a petrol car, say the Maruti Suzuki Alto 800 for about 4 lakh rupees. Each month, you drive for 600 kilometers, and spend about 2,500-3,000 rupees on fuel costs. By cutting the initial price of the E2O from about 6.2 lakh rupees to 4.99 lakh rupees, Mahindra-Reva has made the electric car seem more affordable.
By charging a monthly battery rental of 2,599 rupees, the electric car maker seeks to simulate the purchase of a petrol small car that will be predominantly used in the city. The marketing scheme relies on fact that the E2O’s running costs are just a fraction of what it would cost to run a comparable sized petrol car.
Mahindra Reva calls the new marketing scheme as the “Goodbye Fuel, Hello Electric” program. In a nutshell, the new scheme from Mahindra Reva makes the E2O “seem” more attractively priced and might tempt a few additional buyers to sign on the dotted lines and drive off in the E2O.
A high asking price has been the biggest barrier to the E2O’s sales in India, prompting Mahindra Reva to come up with the latest scheme to promote sales. The electric car maker continues to wait for the Indian government’s subsidies for electric and hybrid vehicles under the National Electric Mobility Mission Plan (NEMMP) 2020.
Interested to buy a Mahindra Reva E2O but not sure on whether the electric car will suit your purpose? You must check out CarToq’s video report on “Living with the E2O”.