How much money do electric cars actually save?

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Despite their greater initial cost when compared to gasoline-powered vehicles, switching to an electric vehicle (EV) in Australia can save drivers money over time.

The main savings come from the cost difference between gas and electricity. Additionally, EVs require less maintenance because they don't use spark plugs, filters, or engine oil. EV users can also save money by reducing tariffs, off-peak electricity prices or by producing renewable energy using solar panels.

Although an EV may cost more upfront, the money saved in the long run can compensate for this. Therefore, when determining whether an EV is a good fit, potential car buyers should consider all considerations, including the original purchase price, running costs, and maintenance costs.

Will switching to an electric vehicle put money in my pocket?

Electric cars in Australia are getting cheaper, faster, and can go longer distances. However, many drivers are still unsure about how they compare to petrol cars in saving money.

Placing safety and performance first when choosing a car is common. However, the cost is also a significant consideration. Vehicles in Australia could become greener and cheaper with advancing technology and more people using electric cars. However, it is important that these cars are powered by renewable energy, not coal-fired electricity.

The upfront price for an electric car in Australia is approximately $46,000 to well above $200,000. Although EVs have higher prices than comparable petrol cars, it is claimed that they are, over time, more affordable to operate. So, where do we stand when we compare the cheaper running costs with the higher purchasing costs?

Electricity charge Vs petrol

The first and key saving one will get when purchasing an electric car is the difference in the cost of petrol compared to the cost of electricity.

In a specific comparison, the price for one litre of petrol is $1,80. However, if we drive a little more than average per year – being 20,000km and if one is looking at a 10 litres per 100 km consumption for the petrol car, then one would have to consider an annual petrol bill of $3,600 per year and maybe another $2,000 on yearly maintenance cost.

In this comparison, one of the downfalls of the petrol car is the petrol tax, which adds around 44 cents per litre to the overheads, which EVs do not have to pay – for now.

So one could argue that electric cars do not contribute to road maintenance and the tax coffers, as if one charges the electric car via solar or the PowerPoint, the Government can not add any tax. So who will pay for future road maintenance?

We expect registration and insurance costs to be the same, even though, in the future, some State Governments might decide to make registering an electric car cheaper than petrol.

Let’s assume the electric car will travel the same distance, and our model electric car needs 15 kWh to drive 100km. So at 30 cents per kWh, I pay $4,50 in electricity to travel 100km in my electric car and $900 for 20,000km.

EV charging with money jar infront of it
Electric cars can save you thousands of dollars in fuel annually

Maintenance of electric car vs. petrol

Maintenance costs are still a relatively unexplored field, as maintenance costs go up as the cars get older. However, many electric cars are only relatively new, so maybe we have not seen the actual long-term maintenance costs.

For now, as electric cars do not have spark plugs, filters, or the need for engine oil, maintenance costs are cheaper. Moreover, the regenerative brake mechanism in an electric car’s battery means brake pads will last longer. Therefore, after some research, I believe that $1100 per annum in maintenance will cover most electric cars.

So in this sample, one is looking at around the $2,000 mark per year to run the electric car and around 5,000 for the petrol car. So over ten years, this will give the electric car a $30,000 advantage.

When celebrating this result, the electric car owner must consider the higher initial purchasing cost and the likely battery replacement costs by year 10.

Overview of electric and petrol cars

At Your Energy Answers, we have a beautiful little calculator where you can enter your car details and compare the two vehicle types and the associated costs.

Electric car drivers can save money by using cheaper electricity rates. They can also save money by using lower tariffs. Additionally, they can save money by using solar panels to power their cars with renewable energy.

These savings all work together over time to counteract the higher purchase price of an Electric car compared to a traditional petrol or diesel-powered one.

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