Cost of Electric Cars in Australia
The popularity of electric cars has really taken off in the past 10 years. Australians are very interested in eco-friendly vehicles with lower fuel costs. Unfortunately, these vehicles can have an upfront purchase price that is more expensive than their petrol-using counterparts. However, with a little research, it becomes much easier to find affordable EVs to serve as both personal and business vehicles.
How much are electric cars in Australia?
Electric cars (also known as electric vehicles, or EVs) start at about $45,000, though most models will be in the $60,000 to $100,000 range. This definitely makes them a long-term investment, since the savings will come from not needing to pay for petrol. Electric cars are getting cheaper, but they are still positioned in the higher end of the market. Many buyers use car loans to help make the purchase more manageable.
Types of electric cars
Many buyers don’t realise that there are several kinds of electric vehicles. Electric cars differ by their battery functionality and their intended use. You can find both new and used electric vehicles on the market today.
Hybrid Electric Vehicles (HEVs)
These cars have both a traditional internal combustion engine as well as an electric motor. The electric motor includes a battery pack that gets charged from excess kinetic energy while the petrol engine is running. The electric motor can then be used to supplement the petrol engine, or it can completely take over if you are in slow-moving, stop-and-go traffic. HEV prices start at around $26,500.
Plug-in Hybrid Electric Vehicles (PHEVs)
These cars work similarly to common hybrids, but their batteries are larger and can be charged by an external source rather than just from running the petrol engine. With this car, you can drive a great distance on battery power and then have the petrol engine kick in once the battery is depleted. PHEVs are very efficient and also take advantage of excess energy from the petrol engine. Prices start at around $42,500.
Battery Electric Vehicles (BEVs)
These cars are entirely electric-based with no petrol engine component. Their batteries are charged by external power sources, like a charging station or home charging unit. You can also install a fast-charging outlet to reduce wait times for a full battery. Another benefit of this vehicle type is that they offer a quieter, smoother ride due to their lack of a noisy petrol engine. BEV prices start at around $47,500.
How much does an electric car cost to operate?
Like with any cars, there will be ongoing expenses that you face outside of the vehicle price itself. It’s important to get a sense of these numbers so that you can plan your budget accordingly.
Electric vehicles are pretty durable, but when they do break, they can be difficult to repair and replace since they require specialised parts and services. Some areas of the country have limited repair facilities and trained technicians that can work with electric vehicles. As a result, insurance costs are about 25% higher for electric cars. Annual insurance premiums can be anywhere from $1,000 to $4,500.
Naturally, one of the main premises of an electric car is the immense savings from not needing to rely on petrol. The average Australian spends about $2,160 on petrol a year and drives 15,000 km, which is roughly $0.14 per kilometre. In contrast, an electric car can be charged for about $600 a year to cover the same distance. Of course, electricity prices and petrol prices both vary over time, but you will easily save money on fuel.
Due to a lower amount of moving parts in EVs compared to petrol vehicles, EVs require a lower level of maintenance. There also is not the same need for fluid changes. According to the Electric Vehicle Council, the average maintenance cost for an EV is about $0.02 per kilometre, or $300 for 15,000 km. A petrol vehicle averages $0.07 per kilometre or approximately $1,050 for the same driving distance.
Fringe Benefits Tax
The FBT is imposed on employers for certain non-cash benefits provided to employees, such as novated leases (employer-backed vehicle purchase for personal use), discount loans, private health insurance, and other perks. Under the recent Electric Cars Discount Bill, electric cars nationwide that have a novated lease structure are exempt from the FBT. This is a major EV tax advantage and can save thousands of dollars.
A research team from Small Business Loans Australia ran an in-depth survey while this bill was being considered. They found high interest among Small and Medium Businesses for electric car purchases in the coming years. New South Wales and Western Australia businesses in particular showed heavy interest in light of the recent legislation, while Queensland businesses showed more resistance.
Government incentives and taxes by state
In addition to the EV tax relief offered by the federal government via the FBT exemption, different states have their own incentives and tax structures. Learn about what your state is doing to make it easier to buy electric vehicles.
|NSW||Road user charge rates:|
|VIC||Road user charge rates:|
|QLD||No current plans for road user charge rates|
|ACT||Possible distance or congestion-based charges may be considered in coming years|
|NT||No current plans for road user charge rates|
|TAS||No current plans for road user charge rates|
|SA||Planned EV tax was recently repealed. Proposed user charge rate was:|
|WA||EV tax currently planned to take effect on 1 July 2027:|
Electric vehicle costs FAQ
Final takeaways for Australian electric vehicles
Electric car costs remain higher than their petrol counterparts, but fuel savings and government incentives have helped more and more Australians afford these cars. As new batteries are developed and additional charging infrastructure is created, the cost of electric cars in Australia will continue to come down.
If you are looking into buying an electric vehicle, you should start by looking at car financing offers that you’re eligible for. Use MNY’s tools to match you with the best loan offers.