Fast read
The cost of electric vehicles (EVs) is often higher than that of petrol-powered vehicles due to various factors. These include the recoupment of the expenditure on research and development, the lower production volumes of EVs compared to petrol vehicles right now, and the demand for EVs relative to their supply.
Some manufacturers, particularly those based in Asia, now offer EVs at lower prices. However, it is essential to note that while the upfront cost of an EV may be higher, they have lower maintenance and fuel costs over the long term.
Hybrid vehicles, which combine a petrol engine with an electric one, may also be more expensive than pure EVs due to the additional cost of the petrol engine. Ultimately, a vehicle's long-term fuel and environmental costs should be considered when purchasing.
Electric car vs petrol car – Which costs more?
When one looks at a petrol or diesel engine vehicle, let’s call this the “Apple”, and then we have a battery-only electric car (BEV), which is the “Orange”. So we can not compare petrol cars vs electric cars in a price-to-price comparison for several reasons because it’s like comparing apples and oranges – nearly impossible.
Yes, petrol and electric cars from the same manufacturer are similar in size and fit out, like the Hyundai Kona, which comes in a petrol version and also an electric car range.
We tend to forget that while by name and manufacturer, they are the same, that’s where the comparison should stop. For example, the number of cars built for both versions will still see the petrol version trump the electric car version right now, and we all know the higher the production numbers, the lower the price tag can be.
Now, this might change in years to come, but because of the manufacturing volume and the higher component of research funds being recovered on the electric car version, the EV version has to cost more. This nuanced consideration underscores the complexity of the electric car vs petrol car debate.
Are electric cars expensive?
Many people often say that electric cars are too expensive, even when looking at basic models that cost between $75,000 and $80,000. While this might be true for the US and European models, this is especially true if it is a vehicle model that is popular right now. But, as with everything post-Covid, it’s all about supply and demand, and electric cars are becoming popular and fashionable.
But other electric cars mainly built in Asia, including China, come in at a surprisingly low entry price. For example, the BYD Atto 3 standard range (small to medium SUV) is currently available via online orders for as low as the $47,000 mark. This vehicle has a battery range of 345km, and the model with an extended range of up to 420km costs a flat $50,000.
MG ZS EV
In a recent announcement, the MG ZS EV has launched their 2023 model, looking stylish and offering Australia’s lowest-priced small to medium SUV with a driving range between charges of 320km for $44,990. This EV model will be ready for delivery in October 2022.
Some observers might say, but I can get the standard MG petrol version at $21,990, and MG is now a Chinese brand – so no wonder they are cheaper. Yes, but the built quality is steadily catching up, and some might remember the Kia’s and Hyundai’s from 20 years ago – you get what you pay for.
What most folks who consider an electric car unaffordable do not necessarily think is that the service costs are, on average, 40% lower, saving thousands of dollars over a decade. No oil filters, oil changes, sparkplugs, timing belts, starter motor and the list; if you are unsure how much you can save, use our calculator here. Also, most BEVs have regenerative braking where the braking energy does not enter heat but recharges back into the battery.
Is a hybrid electric vehicle cheaper?
Another question to consider is, why not opt for a hybrid when considering electric car costs? Maybe they are cheaper and still save a lot of petrol. Yes, they might sound cheaper, but you will find a lot of plug-in hybrid vehicles are more expensive than pure EVs because, in a Hybrid, we have two engines, the petrol engine and an electric one – so cost-wise, not that much savings here, and one still needs the standard maintenance anyway.
The long-term fuel and environmental costs are the most important factor in the overall vehicle costs. Electric cars clearly win out on that one because we are paying $1.50 – 2 dollars for a litre of unleaded petrol, and if we go electric, $4 will cover us travelling 100km.
Why are there not more electric car options available to bring prices down?
Major car manufacturers still have limited production capability for EVs, with many European countries offering incentives to promote the sale of electric cars. However, Australia lags in the legislative framework, so many manufacturers do not send us their latest models and most comprehensive range.
BYD (EV Direct), which runs the Australian company for BYD, aims to bring in an affordable mini hatch called the Dolphin or BYD Atto 2. Rumours say the price will be around $35,000 to $40,000.
So people might want to wait for price parity, which might mean waiting till 2027/28, as by then, production numbers will have ramped up, and battery costs will hopefully come down to make this goal look achievable.
The going cost quote is 1kW of a lithium battery, which is as high as $1000. With battery capacity for EVs starting at 35kWH and reaching up to 70kWh, one can see where the money in an electric car is going – the battery pack.
When we have more supply and manufacturing capacity for lithium technology, predictions are that this will be half the price, and we will see many more affordable electric cars.
Should you purchase one?
If you can’t wait and want to enter the market now, please view the links below for your State or Territory’s EV support mechanisms. In addition, some parts of Australia are giving incentives to purchase a BEV.
Some States will have lower registration or stamp duty rates or cash incentives. At the same time, the Federal Government has foreshadowed the scrapping of the luxury vehicles tax on electric cars over a specific price point.
