Buying an EV? Battery subscriptions could cost you more

Battery-as-a-Service (BaaS) is emerging as a key strategy for automakers to reduce the upfront cost of electric vehicles (EVs), but the model could increase the overall cost of ownership over time due to recurring battery payments and financing commitments.

A Tata Punch EV priced at Rs 9.7 lakh can be purchased for Rs 6.5 lakh under a battery financing plan, while Hyundai's Creta Electric sees its upfront price fall from Rs 18 lakh to Rs 11 lakh. Meanwhile, Maruti Suzuki's Grand Vitara EV also becomes cheaper by nearly Rs 8 lakh initially under the model, according to a report by The Times of India.

However, while buyers benefit from lower acquisition costs, they are required to make recurring battery payments, with some plans also carrying minimum monthly usage commitments that can add several lakh rupees to ownership costs over five to eight years, the report said.


Current BaaS plans charge between about Rs 2.3 and Rs 5 per kilometre, depending on the vehicle. At a rate of Rs 4 per km, a customer driving 15,000 km annually would pay around Rs 60,000 a year, or nearly Rs 3 lakh over five years, excluding taxes, escalation clauses and financing charges.

The economics become more complex when minimum billing clauses apply. According to the report, Citroen's eC3X requires payment for at least 2,000 km every month, resulting in a minimum battery bill of about Rs 4,520 even if the vehicle is driven less. Maruti Suzuki's e Vitara has a disclosed minimum usage of 1,800 km a month, translating into a minimum battery charge of around Rs 7,200 monthly.

For customers driving only 800-1,000 km a month, the effective battery cost per kilometre increases because unused kilometres are still billed. The report noted that many buyers compare only the reduced ex-showroom price with the regular EV price, overlooking that BaaS creates two parallel payment obligations. Firstly, a vehicle loan EMI and secondly, a separate battery payment. As an example, a Tata Punch EV buyer may pay a lower vehicle EMI, but the battery continues to be financed separately, reducing the apparent savings over time.

Automakers, however, maintain that BaaS is primarily intended to improve EV affordability. The report quoted Tata Motors as describing the model as "primarily a financing tool, not a mobility service" aimed at lowering the upfront acquisition cost of electric vehicles.

"Having said that, we are seeing and also believe that most customers prefer outright ownership of their EVs," a Tata Motors spokesperson told TOI.

JSW MG Motor India, which introduced BaaS with the Windsor EV in 2024, said the model has seen growing acceptance. Managing Director Anurag Mehrotra told the publication that around 12-15% of the company's EV sales now come through BaaS, which is available across its MG electric vehicle portfolio.

According to Mehrotra, separating the battery from the vehicle reduces the initial purchase price. He said a conventional petrol car typically costs around Rs 8 per km to run, assuming petrol at Rs 100 per litre and a fuel efficiency of 12 kmpl. Under MG's Windsor BaaS model, customers pay Rs 4 per km for battery usage and about Rs 1 per km for charging, taking the total running cost to around ₹5 per km.

"For customers driving 60 km a day, the monthly saving can be over Rs 5,500. Over five-to-eight years, these savings can add up to Rs 3-5 lakh," Mehrotra was quoted as saying.

(With inputs from TOI)