Volatile petrol prices have many Australians wondering, “Are electric cars cheaper to run?”
Electric cars are generally cheaper to run than petrol cars, thanks to lower maintenance costs and a lower cost per kW. This is good news, considering the unpredictable oil prices here in Australia and worldwide.
But why are electric cars cheaper to run than internal combustion engines? Do the savings outweigh the higher initial cost of buying an electric vehicle? And how much money can an electric car really save compared to ICE vehicles?
Our guide will cover the initial, ongoing, and long-term costs of electric vs petrol cars so you can make an informed decision.
Key Summary
- “Are electric cars cheaper to run?” is a question on everyone’s minds right now with the jump in oil prices
- Purchasing an electric vehicle has a higher up-front cost but can be cost-effective in the long-run
- Electric vehicles lead to savings due to lower maintenance costs and petrol savings
- As electric vehicles continue gaining popularity, up-front costs may become more affordable
- Electric vehicle ownership can become even more cost-effective with the addition of home EV charging
Are Electric Cars Cheaper to Run Than ICE?
Yes, electric cars can be generally considered cheaper to run than vehicles with internal combustion engines over time.
This is largely due to the reduced maintenance costs that come with electric vehicles. EVs also offer significant savings at the pump since they rely on electricity rather than petrol. This can lead to thousands of dollars saved on petrol costs over long-term ownership.
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EV vs ICE Costs by Factor
Upfront Costs
EVs are generally more expensive to purchase than ICE vehicles. Still, EV prices are declining each year as demand increases and more EVs are being manufactured. This will result in lower prices that feel more attainable to drivers hoping to make the switch to an EV.
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Maintenance Costs
Are electric cars cheaper to run? If we’re talking maintenance costs, the answer is a clear ‘yes’.
Electric vehicles have cheaper maintenance costs than petrol vehicles because they have fewer moving parts.
Petrol cars have fluids that need to be monitored and changed, complicated engines and systems, and parts that can break.
Electric vehicles have cheaper maintenance costs due to:
- No oil changes needed
- Fewer moving parts
- Requires less servicing
- Less frequent parts replacements
- More predictable maintenance
- Reduced brake pad wear due to regenerative braking
According to the Electric Vehicle Council, electric vehicles can cost 30 to 50% less to maintain compared to petrol cars. This can mean hundreds of dollars (or more) saved on maintenance every year (Source: Electric Vehicle Council).
Depreciation Value
Electric vehicles generally depreciate faster than ICE cars. More popular EV models tend to hold their value better.
While depreciation remains a concern, we expect to see this improve in the future. As drivers notice the high maintenance costs associated with upkeep of an older petrol car, EVs may see higher resale appeal.
Costs per km
The average Australian drives around 12,000km per year and spends around $2,500 on petrol. This equals an average cost of around $0.20/km for an ICE vehicle. (Source: Electric Vehicle Council: Will I save money by owning an electric vehicle in the long run?)
In comparison, it would cost approximately $500 to charge an EV over 12,000 km. This equates to $0.04/km.
Note: Your driving habits, charging options, and government incentives will affect your savings potential.
| Petrol Car | Electric Vehicle | |
| Up Front Costs | Typically cheaper | Generally more expensive; however affordability will continue increasing as more EVs are produced |
| Maintenance | Complex moving parts require frequent maintenance and repairs, such as oil changes, new spark plugs, fluid changes, and more | Fewer moving parts lead to less money spent on repairs |
| Depreciation | Tend to hold value better than EVs | Generally lose value faster than ICE cars |
| Costs per km | Costs more per km to run than EVs, especially with fluctuating petrol prices | Costs less per km to run than petrol vehicles |
Example Breakdown of EV vs ICE Fuel Costs
Here’s a look at how popular petrol models compare to some of Australia’s most popular electric vehicle models. Keep in mind, these are approximate numbers and can change based on charging habits, driving habits, and petrol costs (Source: EVDB Australia).
Compact SUV: Toyota RAV4 GX vs. Tesla Model Y
| Toyota RAV4 GX | Tesla Model Y Long Range SUV | |
| Approx. Petrol Cost Per Year | $1,680 | $0 |
| Approx. Electricity Cost Per Year | $0 | $715 |
| Total Fuel/Electricity Cost Per Year | $1,680 | $715 |
Compact Car: Toyota Corolla Sedan (Hybrid) vs. BYD Dolphin
| Toyota Corolla | BYD Dolphin | |
| Approx Petrol Cost Per Year | $980 | $0 |
| Approx. Electricity Cost Per Year | N/A | $617 |
| Total Petrol/Electricity Cost Per Year | $980 | $617 |
Cost Benefits of EVs Over ICE in the Long Run
Electric vehicles typically boast lower long-term costs compared to petrol cars over the vehicle’s lifetime.
These long-term savings are a result of:
- Fuel savings
- Lower maintenance costs
- Tax credits and government incentives
- Lower running costs
These savings can be further amplified with the use of home EV charging.
Looking to Transition into EV and Need Custom EV Charging Solutions?
With the uncertainty surrounding oil costs, many Australians are choosing to research EV ownership. EVs can offer protection against rising oil prices and uncertainty.
Purchasing EVs may cost more up front, but the long-term savings can outweigh the initial investment. With decreased maintenance costs and no petrol to purchase, EVs can be a cost-effective choice, especially with home charging.
Wondering if EV charging is right for your home or business? Our fully Australian team of licensed electricians is your comprehensive EV charging solution.
From sales and commissioning to installation and servicing, our award-winning electricians handle all aspects of electric vehicle charging. Contact us with questions or for your free quote.
