How much will you actually save with an electric car?

Jacob Joseph 7 June 2016

electric car

Electric cars drive savings at the petrol pump and in the garage.

Once just for hipsters and greenies, electric vehicle (EV) critical mass is right around the corner. High costs, disincentives from the government and non-existent public infrastructure has seen the adoption of EVs lag in Australia. Electric car sales are in the low thousands nationally. Throw a stone in Paris or San Francisco and you’ll hit an EV charging station. But, Tesla is generating a buzz — when was the last time you remember someone camping out to pre-order a car?

Australians are slowly coming round to the idea of electric cars. As well as reduce the driver’s carbon footprint, electric vehicles deliver savings at the petrol pump and EVs require less maintenance than a petrol fuelled vehicle too. Petrol run and electric cars have different price points, you pay more upfront for an electric car so you can save on running costs. But how much will you actually save?

How much time does it take to recoup the cost of a Tesla?

What’s electric?

Electric vehicles can be pure electric, that is the car is run completely from a battery, there are hybrid electric cars too. Hybrids use a combustion engine to start and then switch to electricity when the car reaches the right conditions.

Did you know?
Pure electric cars require a charge from the wall or charging station; whereas hybrids charge the battery through regenerative braking and the engine alternator. Electric cars also use regenerative braking.

Comparison of 2015 BMW i3 & BMW M135i

CarTypePriceAnnual fuel costsBMW service package0 - 100 km ph
BMW i3 (range extender)4D: Hatchback$69,990$483$850 (basic)7.9 seconds
BMW M135i4D: Hatchback$70,344$1784$1,240 (basic)4.9 seconds

*Annual fuel cost estimate:

At the petrol pump: fuel savings

Petrol is an increasingly expensive commodity, per km travelled, electricity is a cheaper source of fuel than unleaded or diesel.

The Australian Electric Vehicle Association (AEVA) represents individuals and organisations with an interest in raising awareness about the benefits of electric vehicles.

An AEVA representative gave the following when discussing EV savings: “Recharging using cheap overnight power at 12c a Kilowatt Hour (kWh) equals a cost of less than 2c per kilometer or $1.70 per 100km.” This is a conservative estimate for off-peak tariffs. AGL can provide off-peak rates as low as 10c per kWh to some NSW residents.

At a high 24c a KwH, it (the cost to recharge) is $3.40 per 100km. A modern efficient petrol car run on petrol costing $1.20 a litre has fuel costs of closer to $9.00 per 100km. This is a $1400 saving over 20,000kms.”

ABS figures show Australians drive on average 15,000kms per year, expect a saving of $1,000 or more every year from plugging in instead of filling up.

How much does the electricity cost for an electric car?

In the garage: savings on maintenance.

It can be difficult to say exactly what the saving are on electric car maintenance costs. There’s less chance you’ll break down and service packages are cheaper too.

Compared to petrol fuelled cars, EVs are more efficient in urban environments. EV engines are better at converting energy to movement, especially from a standing start; regenerative braking uses the engine to slow the car as well as charge the battery.

Electric cars have fewer moving parts. “An electric car does not need oil changes or cooling system flushes and will have much less wear on the brakes,” said an AEVA spokesman.

The Australian Energy Commission (AECOM) published a handy comparison of maintenance costs between electric and petrol run vehicles in the 2011 report, Forecast uptake and economic evaluation of Evs in Victoria.

Vehicle sizePetrol run: maintenance cost / per kmElectric run: maintenance cost / per km
Small5.86 cents4.10 cents
Medium4.45 cents3.12 cents
Large4.34 cents3.04 cents

Electric cars cost less to maintain than combustion engine cars. The battery is one major electric vehicle component which is expensive and will need to be replaced after some years.

The battery

The battery in an electric car will need to be replaced at some point. Batteries degrade over years and after a decade can only hold about half the original charge. There are tips for getting the most life from electric car lithium-ion batteries, such as keeping the charge at about 50%; however, degradation  is inevitable and electric car owners will have to deal with replacing an old battery at some point. Tesla offer an 8 year limited warranty on batteries, looking at overseas prices, batteries can cost more than $10,000 to replace when out of warranty.

Rooftop solar energy and the Tesla Powerwall.

What are the benefits of driving an electric car?

As well as the cost savings from petrol and vehicle maintenance, there are other things to feel good about too:

  • Electric cars produce zero emissions on the road and if an EV is charge from a renewable source such as solar energy, electric cars can be emission free.

Electric cars cost more to buy than petrol run vehicles. The price will drop as the manufacturing capabilities of  car companies improves and the price of parts decreases. It’s a case of paying a higher upfront price for lower running costs over the years. If you’re in the market to spend $70 - $100,000 on a car, an electric vehicle can make sense. For everyone else, we’ll have to wait till the price becomes a little more affordable.

 Your electric car questions answered

What’s the difference between hybrid and full electric?

Hybrid cars have an internal combustion engine and an electric battery. Electric vehicles are powered by a battery only. A hybrid vehicle uses the combustion engine to start the car and switches to battery power when cruising conditions are ideal.

Are there any incentives from the government if I buy an electric vehicle?

Currently in Australia, there are no government incentives to purchase an EV. In fact, some models like the Tesla may attract an additional tax.

What is the petrol price cycle?

The petrol price cycle is the movement of petrol prices from low to high. Sometimes the cycle can last a week, other times a couple of months. You may have noticed that it’s cheaper to fill up on a particular day of the week, this is the policy of petrol station owners and is not directly related to the wholesale price of petrol.

How much does it cost to charge an electric car?

The cost of charging an electric car depends on your feed-in tariff rates. Common sense says to charge an electric car overnight during off-peak tariff periods. Assuming that it takes 20kWh to travel 100kms and off-peak tariff rates are $0.20 cents per kWh, it costs $4 to travel 100kms, excluding Tesla, 100 kms - 200kms is the electric range of most EVs.

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One Response to How much will you actually save with an electric car?

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    Paul | June 10, 2016

    Just a correction. Although Australia is one of the worst places in the world to buy an electric vehicle*, there are still some incentives e.g. they are stamp duty exempt in the ACT and there are concessions in the luxury vehicle tax from the Commonwealth. Victoria also offers a $100 discount on registration for hybrid/electric cars. So there are no incentives on the actual purchase price but there are a few crumbs here and there if you know where to look.

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