Are electric vehicles really better than petrol cars?

Looking at the potential savings

In 2025, the upfront purchase price of a brand-new electric vehicle (EV) in Australia sat between $29,990 (plus on road costs) and over $400,000 for luxury models. It all depends on your budget and what you’re looking for.

According to the Climate Council, the average new petrol car in Australia uses around 6.9 litres of fuel per 100 kilometres and Compare the Market research says Australians drove an average of 15,668 km per year in 2023. With fuel prices averaging $1.94 per litre in the last three months of 2023 across our five largest cities, a quick calculation shows that a typical motorist spends $2097 on fuel per year. An EV, on the other hand, like the Hyundai Ioniq 5 sedan, uses less than 14 kilowatt hours to travel 100 kilometres.

At 33 cents per kWh, an EV driver has an annual energy cost of $724 – that’s $1,373 less than a petrol car.

*These figures are for demonstrative purposes only. The actual rate depends on the customer’s home energy plan rates and how much they charge at home or using public charging stations, which attract higher fees. https://next.agl.com.au/electrifynow/how-we-calculate

EV drivers can save even more if they’re on a lower tariff, use off-peak rates or have solar panels at home. And some energy providers, including AGL, have special plans that are designed for EV drivers.

EV drivers pay less for registration in ACT and Victoria, and there’s free registration until 2027 in NT, plus various stamp duty discounts and rebates across the country. And because there’s no engine, EVs typically require fewer replacement parts – with spark plugs and engine oil a thing of the past. Even brake pads are said to last longer as the regenerative braking mechanism in an EV is designed to power its battery while slowing down the car.

Over time, these savings can help to offset the higher purchase price of an EV. The Electric Vehicle Council has pulled together a range of tools for calculating EV total cost of ownership, so you can figure out potential savings.

How far away is price parity?

The purchase price of an entry-level EV is becoming less of a barrier for Australians, with more makes and models available at lower price points. With about 114,000 new battery electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV) sold in Australia in 2024, more vehicles are also entering the second-hand market.

Some entry-level compact EVs have already achieved retail price parity with similar-sized equivalents, but the price comes down to the size, features and the brand you want. Some experts say full price parity will be achieved in around 2028, following the implementation of a fuel efficiency standard sometime in 2025.

According to research by the Electric Vehicle Council, seven in ten Australians say they would buy an EV if it were the same price as a petrol car. There are many options that now retail under $50,000.

Petrol versus electric charge

While petrol cars need petrol stations, EVs need chargers. As more Australians choose to drive an EV, public charging infrastructure is expanding to meet demand.

The Australian Renewable Energy Agency is currently working on an ultra-fast national charging network, powered by sustainable energy sources. Located along major highways across the east coast of Australia including Adelaide, Perth and Tasmania, they are spaced approximately 150km apart, allowing drivers to feel confident they can go the distance on longer journeys.

There are charging stations located across Australia in shopping centres, office complexes and service stations. AGL now offers kerbside charging in Sydney, with over 150 chargers available for anyone with a compatible vehicle to use (and free parking while charging!). But it’s more economical to do the majority of your charging at home. 

Environmental benefits

While many EV drivers would like to use renewable energy to charge their vehicle’s battery, the reality is that charging an EV battery often uses power generated by fossil fuels. This means EVs do contribute to greenhouse gas emissions through charging, but they produce half the lifetime emissions of a standard fuel vehicle. The Green Vehicle guide’s lifecycle emissions page can help you estimate your emissions from electricity generation.

The transportation sector is currently responsible for up to 21% of Australia’s greenhouse gas emissions, so adoption of EV technology presents a big opportunity to reduce Australia’s carbon footprint.

The Federal Government aims to generate 82% of Australia’s electricity from renewable energy by 2030. EVs powered by this electricity will contribute to achieving an emissions reduction target of 43% below 2005 levels by 2030 – and net zero emissions by 2050.

Let’s not forget the many other benefits to our communities. A reduction in air pollution and road noise creates a more pleasant living environment for all Australians, while reducing our carbon emissions. People have even used their EV batteries during natural disasters, when power supply was unreliable or completely cut.

As the technology behind EVs continues to advance, it’s an exciting time for both car manufacturers and consumers. By considering the whole cost of EV ownership, you can make an informed decision that could save you money in the long run and positively impact the future of the planet.