Do Electric Vehicles Actually Save Money?

There’s a lot of talk surrounding the true economy of an Electric Vehicles. On the surface they appear to be more expensive, firstly through a typically high sticker price, and then in our imaginations as we imagine plugging the car into the electricity supply to charge it up every day. With energy prices as they are already, surely adding a car charging up every night to all of that is going to be bad for business?

In today’s piece, we are exploring the validity of claims that, in fact, contrary to the shock of sticker prices and perceived expense of charging, electric cars are cheaper. Many claim that EVs are cheaper overall, but we shall see.

Average Running Costs

The main perception of cost when it comes to electric cars is in the frequent charging. Given that the single-charge range of an EV can range from as little as 180km to as many as 560km if you have a Tesla, the need to charge daily at least to some degree looks inevitable. Figures from whichcar.com Australia highlighted, however, that we should not fear this.

According to the whichcar.com piece, if we assume that petrol costs around $1.60 a litre, and electricity costs about 0.28c per kilowatt hour, and that the average Australian drives around 20,000km per year, you’re likely to make savings on an EV when compared to a traditional petrol car. More detailed numbers used the example of a Nissan Leaf --- one of the best-selling EVs in the world --- which needs 10kW to charge enough for 100km of range. Using our electricity price of 0.28c/kWh, we would need just $2.80 to get that range. Given the Leaf has a total range of 400km, a full charge from zero to full would cost the (not) princely sum of just $11.20.

The same data showed that a Toyota Corolla with a 2.0L petrol engine would need $2016 each year in fuel costs. The Nissan Leaf, on the other hand, would only need $560. In this case, there are clear savings to be had.

Government Subsidy

Around the world, governments have been rather generous when it comes to purchasing more expensive EVs, offering customers tax refunds and other financial incentives to make the switch. In Australia, however, it hasn’t been quite as comprehensive. There are some regional schemes, however, that help to make an EV better value.

For example, in the Capital Territory, there is no stamp duty on brand-new EV purchases, and there is a 20 percent discount on registration. Victoria has an exemption on EVs that would otherwise be in the luxury bracket for stamp duty, and an extra $100 discount on registration. In order to get the benefits in Victoria, however, you have to also be purchasing an EV worth more than $77,565. This means in order to “save more” you have to spend a lot more in the first place.

Do EVs Really Save Money?

Put simply, an electric vehicle in the short term will definitely not save you money. The sticker price and on-road charges, depending on where you are, will always set you back far more than a traditional combustion-engine car.

In the longer term, however, you will start to see significant savings. There’s no doubt that the running costs are lower, and the added convenience of not having to visit petrol stations is a big bonus. Furthermore, as technology improves, the purchase prices of EVs will also inevitably come down, bringing parity and even better value between them and petrol cars. At that point, you will be able to experience savings from the get-go. It does seem that the future is electric.