Will Electric Vehicles Ever Be More Cost Efficient Than Their Petrol Counterparts
Posted by: Hannah Norton on 15/03/2022
Category: News and Events
- New electric car owners could be waiting more than a decade to see the cost benefit of their purchase, new Compare the Market research shows
- The manufacture of electric vehicles produces higher emissions than petrol, but just two years of petrol car use will generate more emissions than an electric vehicle in its lifetime
Picture the time it takes a child to complete their education – from their first day of preschool through to the graduation cap throw at university.
If you bought an electric car today it’d take just as long to become more cost effective than their petrol guzzling counterparts, according to new research from Compare the Market.
The comparison site analysed the average lifetime running costs of an electric vehicle, compared with petrol and hybrid models of the Hyundai Kona SUV to determine the most affordable model over time.
The data revealed that despite there being an almost $40,000 difference in purchase price between the electric and petrol models, the electric counterpart works out to be cheaper in the long run. The catch? You would need to own the car for 18 years before those cost benefits became clear.
It’s a decent setback considering that the average lifespan of a car in Australia is 10.6 years.
So, what makes them so expensive? If it weren’t for the high manufacturing costs (almost 50% higher than that of a petrol vehicle), they would be the cheapest by a long shot. Compare the Market found that the petrol-powered Kona cost around 550% more in annual refuelling costs ($2,531.25) than it did to recharge the electric car ($384).
As for the hybrid equivalent, the purchase price sits between the other two models at $42,942. The long-term running costs exceed that of the EV after 12 years of ownership, however they never become more affordable than the petrol model.
Emissions also play a big part in many consumers’ purchasing decisions. Compare the Market found that at 13 tonnes each, the process of manufacturing both hybrid and electric vehicles actually produces more carbon dioxide (CO2) than the manufacturing of petrol engine vehicles (10.5 tonnes). However, EVs produce no emissions, and in just two years a petrol car will generate more CO2 emissions than its electric cousin will over its lifetime (including the emissions from manufacture).
Hybrid car emissions don’t drop below that of petrol until approximately 4 years after purchase.
Data released by the Electric Vehicle Council in August revealed that there was a 169% increase in electric vehicle (EV) sales from the first half of 2020 to the same period this year.
Despite the rising number of EVs on our roads, the question of affordability remains. Of 31 models available in Australia, only 14 of them are priced under $65,000.4 As a measure of comparison, the cost of most fossil fuel cars in Australia ranges between $20,000 - $50,000. However, according to The Bureau of Infrastructure and Transport Research Economics (BITRE), EV prices are set to decrease to an average of $41,184 by 2030.
When that finally happens, electric cars will pay off much sooner. A win for the environment and your hip pocket!
For more information on the cost of running EVs and petrol vehicles in Australia, please visit: https://www.comparethemarket.com.au/car-insurance/features/electric-vs-petrol-value/