Electric vs Petrol: A Cost Breakdown for Australian Drivers

 

Electric vehicles have become incredibly popular in Australia. In 2022 alone, the demand for EVs grew by 65 percent.

A huge reason why the market has had a drastic shift in favour of electric vehicles is that Australia plans to ban the sale of new petrol and diesel cars by 2035. This means electric vehicles are the future for Aussies. So, the earlier you adapt, the better.

But is this change light on the pocket? Should you shift to EVs immediately, even if you don't have the budget? Will you save or be greater in debt with an electric car?

Well, these are some of the questions we'll answer in today's post. Read on to figure out whether you're better off with your current petrol car or if you should switch to an electric one.

Let's get started!

Electric vs Petrol: Initial Cost

Let's begin with the basic costs. On average, an electric car costs around $88,000.

One of the cheapest options is Chevrolet Spark, which costs $27,000. Luxury electric cars like Tesla Model S can cost up to $130,000.

In comparison, petrol cars are way cheaper. On average, a petrol car costs around $30,000. Kia Picanto is your cheapest option starting at only $15,000, while Rolls Royce Phantom costs one million AUD.

Not only do petrol cars have more affordable price points, but they also offer a wider price range. This means when it comes to the initial cost, petrol vehicles are significantly more affordable than EVs.

However, the running costs of an electric car vs. a petrol vehicle is an entirely different subject. And this is where electric cars win from petrol and diesel cars.

Electric vs Petrol: Running Costs

Currently, one litre of petrol costs around $1.68 in Australia. The rate varies from area to area, but it does not exceed $1.76. Similarly, diesel costs around $1.94/litre but can touch $2.10/litre in some areas.

Most vehicles in Australia travel 13,400 km every year. And they use 10.8 litres per 100 kilometres.

Let's do the maths:

• Petrol: $1.68 x 10.8 = 18.1 AUD.

This means you'll be spending $18.1 for every 100 kms, which comes down to 2425.4 AUD per year.

• Diesel: $1.94 x 10.8 = 20.9 AUD.

This means you'll be spending $20.9 for every 100 kms, which totals $2800 annually.

Of course, this is a rough estimation, and your exact expenditure will depend on your specific usage, car model, engine efficiency, and local fuel rates.

On the contrary, electricity costs around $0.2 - $0.4 per kW, and you need about 18 kW to travel 100 kms.

Given this, your annual running costs would lie between $450 - $1000 for an electric vehicle, which is 2.5x cheaper than petrol or diesel cars.

Other Expenses to Consider

Owning a car doesn't mean you only have to consider initial costs and fuel expenses. There's a lot more that keeps a car running and lawfully yours.

Here are some other expenses you must consider when comparing electric and petrol vehicles:

Insurance

Since electric vehicles are more expensive, their insurance is 13% higher than conventional vehicles. On average, you should expect to pay around $800 - $2500 per year.

However, as EVs become more and more plentiful on our roads, some insurances have begun to provide flat coverage for electric cars too. Insurers have begun to include EVs under their general cover policies. That’s why it’s a good idea to shop around as much as possible to ensure you don’t have to empty your pockets for EV insurance.

Maintenance

Electric cars are easier and cheaper to maintain. Unlike petrol cars, electric vehicles do not require regular oil changes and engine repairs. These vehicles run on lithium-ion batteries that conveniently last 10 - 20 years. Hence, the only maintenance they require includes brake pad replacements, suspension checks, and tire maintenance.

Automobile experts recommend taking your electric vehicle for service every six months, even if you don't see a problem with it. These bi-annual checks help ensure that the battery (i.e., the most costly component of the car) is running optimally. Each service session costs anywhere between $150 - $400.

The service sessions for petrol cars cost more or less the same. But you'd feel the need to take them to the mechanic more frequently.

Registration

Registration fees vary across Australia. Some areas charge by cylinders, and other areas by driving risk.

Generally, electric cars get a concession on registration since these vehicles are environment-friendly. Any petrol-based vehicle with 1-3 cylinders is also charged the same. However, if the number of cylinders exceeds the count of four, the government of Australia increases the registration fee.

Range

The range of a vehicle refers to how far it can go on a single tank of fuel. An electric vehicle can travel up to 650 km on a full charge, while a petrol car can travel up to 1800 km or more.

Plus, it's easier to find a fuel station for petrol or diesel but difficult to find a charging station for an electric vehicle. This is both a financial and physical inconvenience when it comes to EVs.

So, Which One Is Cheaper?

So far, it's a tie. Electric vehicles have low running costs, discounted registration fees, and cheaper maintenance. Meanwhile, petrol cars have cheap initial costs, affordable insurance, and better range.

But there's another aspect that can help us determine the winner here. And that's the resale value.

Currently, the resale value of petrol-based cars is 50 to 60 percent of their original value. But electric cars resell for only 40% of their original value if they're 3-4 years old.

So, technically petrol cars win the game! But it is expected that the upcoming ban on petrol cars will lead to a dramatic decline in their resale value, so EVs are the way to go. We recommend learning about the hidden costs of buying a car in Australia before making a decision!

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DISCLAIMER: This is all based on opinion please research and consult with all relevant parties to make the best buying decision.