Electric vs Petrol cars: Which one is cheaper?

Fast read

Due to the highly inflated fuel cost, electric automobiles are often less expensive to operate than petrol vehicles. According to the Electric Car Council of Australia, the cost of operating an electric vehicle is roughly 70% less than that of an internal combustion vehicle.

Depending on the model and driving conditions, the average cost of operating an electric vehicle is between 10 and 16 kilowatt hours per 100 kilometres. At the current price of gasoline, it can cost roughly $20 to go 100 kilometres in a gasoline vehicle versus $4.50 in an electric vehicle. However, the initial cost of an electric car is frequently more than a gasoline-powered vehicle's.

How much will an electric vehicle save me over ten years?

As a general statement, you could argue that electric cars are cheaper to run than petrol cars, simply because of the fuel cost. So let me try to explain, by the way, that Your Energy Answers website has a calculator where you can check the running cost of a petrol car versus an electric car.

electric vehicle charging
Electric vehicles save significant amounts of money because of their absence of fuel

Common considerations regarding Electric cars.

When discussing the advantages and disadvantages of electric cars versus petrol cars, the most common topic is cost and how much money you can save with an electric car.

Especially in the past months, with petrol prices fluctuating widely, many customers wonder if an electric car will cost them less to run. Since electric cars are still a relatively modern technology, the number of consumers who have experienced this technology is relatively small, so there are not too many friends and family one can ask for advice. Some of the questions we have seen and will be answering in this FAQ are:

  • How much less do electric cars cost than petrol cars to purchase in the 1st place?
  • How substantial are the savings on repairs and operational expenses with an electric car?
  • What are the typical running expenses for an electric vehicle?
  • What is the average electric or hybrid car cost?
  • On average, how many watts does an electric car consume every kilometre?

Much to consider when weighing up the cost of running an electric car vs an LPG/petrol car. For those who don’t know their electric car’s kW/h per km, it’s best to break each topic down to see which option will save you the most money in the long run.

According to the Electric Vehicle Council of Australia, the cost of operating an electric vehicle is around 70% less than that of an internal combustion vehicle. In our sample, let’s calculate a car that drives 15,000 km per year, which is the typical Australian household average driving distance.

The cost of driving an electric car

In general, depending on the electric car model and driving environment, the average kilowatt-hours you need to have an electric car drive a hundred kilometres is between 10 and 16-kilowatt hours.

In this example, if the car uses 15 kWh per 100 km and pays 30 cents per kilowatt/h of electricity, the fuel price for an electric vehicle to drive 100km is $4.50, and the cost per km is 4.5 cents.

Consequently, covering a distance of 15,000 kilometres will incur a fuel cost of under $700.

So 150W is the same amount of electricity that a 10W LED bulb will burn in 15 hours, or the consumption of a typical ceiling fan for 1 hour, or the running of an LCD TV for 1 hour.

electric car charging
Electric vehicles can be charged in public stations

The cost of driving a petrol-powered car

Petrol cars, of course, depending on size, on average, still require 11-12 litres of fuel to go 100 km. At petrol prices of around $1 80 per litre, driving 100km will cost me about $20 for 100 km and over $3000 for the annual 15,000km. That means when compared to an electric vehicle, my petrol car will cost me nearly $2,300 more to run each year*. *(As electricity prices and fuel prices fluctuate regularly – this estimate is only an indicative figure).

Is the electric car even cheaper to run – if I fuel the vehicle with renewable energy? 

Those planning to purchase solar panels and batteries can store their renewable electricity. However, if this energy is used to run the electric vehicle, then one could argue that the running costs for the electric car are NIL.

This is not quite true, as the electricity used to fuel the car could be exported into the grid and sold as feed-in tariff back for at least 5 cents per kW/h. In this case, the running costs would be a little more than $100 per year, a significant discount on the price of a petrol car.

But to be fair, we also need to consider the purchasing cost of the solar and battery system, at which point the price is at least $700 per annum again, and possibly more.

What about the cost difference for maintenance? 

Electric cars seem less expensive to repair, resulting in more maintenance savings. In addition, the engine is a fully sealed unit designed for hundreds of thousands of kilometres, resulting in less need for regular repairs or replacement of moving parts.

If you spend $1,800 to $2,000 a year on maintaining your petrol car, you will find that an EV vehicle will require half that cost. So you got a further thousand dollars saving in your maintenance cost for an EV. Also, some State Governments propose to make the rego costs cheaper for EVs.

So one can argue that the annual savings of an EV over a petrol car could be as much as $4000, being $1000 for maintenance and $3000 for petrol and registration.

Sounds great, but it’s not a fair comparison, because in my petrol price, usually there’s around a 40 to 45 cent that the Federal Government charges in a road user tax. In theory, that tax, generating billions, should repair the roads, but it frequently contributes to general Government revenue.

So petrol cars pay for road upkeep, and EVs get a free ride because you don’t have to pay that tax if you pull the electricity out of the solar system or the grid.

Will a road user tax replace the petrol tax? 

The State of Victoria recently tried to introduce a road distance tax for EV vehicles. However, as there are currently no tag registrations on all roads in Victoria, how would the Government know how many km a particular EV has travelled? There has been a suggestion to fill out a logbook each year, but I wonder how accurate those reported km’s would be?

This system is currently only tried in Victoria, and I see a future where major roads will have sensors to give the Government an idea of how much in road user fees they should charge you annually. But for now, an EV has the advantage of avoiding this tax.

So how much are the actual long-term savings?

We established that an EV can be up to $4000 per annum cheaper than petrol cars right now, which means over ten years, this saving will balloon to $40,000. But many EVs right now will cost you at least $20,000 more to purchase than the equivalent size petrol car.

That means with my $4,000 savings; it will take five years before one is financially in the plus because of the higher investment.

Looking at current battery warranties, I suspect the degradation will mean one will only have 70% of battery capacity left, leaving us with shorter distances between recharges and more long-distance trips.

So, let’s say we change the battery after ten years, and the replacement cost is $10,000. So, by year 10, we have now built up in our EV a total saving of fuel and maintenance of $40,000 – $20,000 initial higher purchase price -$10,000 for the battery leaving a 10-year saving of $10,000, not counting any future road user tax.

With a new battery after ten years, I suspect an EV’s resale price will be better than a petrol car, but by how much will be utter speculation.

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