Are electric cars really better than petrol cars?

Higher purchase price; lower running costs

In 2019, the upfront purchase price of a brand-new electric vehicle (EV) in Australia ranged between $46,000 and $260,000. While prices sit higher than similar petrol or diesel models, EVs are much cheaper to run.

According to the ABS, an average petrol vehicle clocks up 13,400 kilometres in a year and uses 10.8 litres of fuel for every 100 kilometres travelled. With fuel prices averaging $1.43 per litre in 2018-19, a quick calculation reveals that a typical motorist spends $2,069 on fuel per year. An EV, on the other hand, uses around 18 kilowatt hours to travel 100 kilometres.

At 30 cents per kWh, an EV driver has an annual energy cost of $723 – that’s $1,346 less than the petrol car.

EV drivers can save even more if they’re on a lower tariff, use off-peak rates or have solar panels at home. And more recently, energy providers including AGL have released special plans that are exclusive to EV drivers.

In most states, EV drivers pay less for registration and their cars require fewer replacement parts – with spark plugs, filters and engine oil relegated to the past. Even brake pads last longer as the regenerative braking mechanism in an EV is designed to power its battery.

Over time, these savings offset the higher purchase price of an EV. Research by Evenergi found a $5,000 gap in total ownership cost over five years.

There has been talk of introducing a ‘user pays’ system for road users to replace the excise tax on fuel. A study by Infrastructure Partnerships Australia found that an EV owner would still save $3,600 over eight years even if they were to pay a road user charge of four cents per kilometre.

How far away is price parity?

The current purchase price of an entry-level EV is still a barrier for many Australians, especially since so many of us purchase second-hand cars. There were 6,000 EVs on our national roads in 2018, and we can expect to see them snapped up once they come on to the resale market.

According to research by the Electric Vehicle Council, seven in ten Australians say they would buy an EV if it were the same price as a petrol car. We’re almost there. Exciting new models including the Hyundai Ioniq, Renault Zoe and the Nissan Leaf all retail under $50,000.

Options are increasing and prices are lowering as battery technology improves. We’re so close to price parity, with both Deloitte and Bloomberg pinning 2024 as the year we’ll see EV showroom prices match petrol car prices.

Petrol versus electric charge

While petrol cars need petrol stations, EVs need chargers. As more Australians choose to drive an EV, public charging infrastructure will need to expand rapidly to meet demand.

The Electric Vehicle Council reported an infrastructure increase of 140% in 2019. The Australian Renewable Energy Agency is currently working on an ultra-fast national charging network, powered by sustainable energy sources.

There are already close to 2,000 charging stations located across Australia in shopping centres, office complexes and service stations. Tesla runs its own network of 500 destination chargers and 40 superchargers, the latter offering a 30-minute full charge of a 75kWh battery for $31.50.

Most EV drivers are still choosing to charge at home via a standard 240V outlet. A full charge typically costs between $22 and $30 depending on the energy source. A wallbox charging system can reduce the 10-hour charging time by half.

Environmental benefits

While many EV drivers would like to use renewable energy to charge their vehicle’s battery, the reality is EV battery power is still largely generated by fossil fuels. This means EVs do contribute to greenhouse gas emissions, but surprisingly their contribution is less than 50% of a comparable petrol car. A petrol car contributes 125g of CO2 per kilometre, while an electric car using traditional and renewable energy sources only contributes 57g.

The transportation sector is currently responsible for up to 19% of Australia’s greenhouse gas emissions, so widespread adoption of EV technology presents a big opportunity to reduce Australia’s carbon footprint.

The Bureau of Infrastructure, Transport and Regional Economics has forecast an EV market share of 60% by 2046. This shift in consumer behaviour could result in a reduction of 18 million tonnes of CO2, the equivalent of taking eight million petrol cars off our roads.

Let’s not forget the many other benefits to our communities. A reduction in air pollution and road noise creates a more pleasant living environment for all Australians.

As the technology behind electric vehicles continues to advance, it’s an exciting time for both car manufacturers and consumers. We’re powering towards a future that includes self-driving vehicles and zero-emission targets. Motorists are ready to embrace the possibilities.

The debate over petrol versus electric will continue in some circles, but for many Australians, the evidence is clear. EV researcher Gail Broadbent sums it up neatly: “When it comes to health, noise and the wellbeing of society, electric is the way to go.”

Figures and information provided in this article are true and accurate as of 27/12/019.