EV vs. Petrol: How Much Can You Save by Switching to an Electric Car?

With fuel prices fluctuating and electric vehicle (EV) adoption on the rise, many Australians are wondering: Is switching to an EV really cheaper than driving a petrol car? 

According to the Australian Energy Market Commission (AEMC) 2024 Report, transitioning to an EV could cut annual transport costs by up to $2,000 per year compared to a petrol vehicle. Beyond savings, EVs offer environmental benefits and require less maintenance, making them a future-proof choice. 

This guide breaks down the real costs of petrol vs. electric vehicles, exploring savings on fuel, servicing, and government incentives available for making the switch. 

Disclaimer: This article provides general information only and does not constitute financial, legal, or tax advice. It has been prepared without taking into account your personal objectives, financial situation or needs. You should consider whether this information is appropriate for your circumstances and seek independent advice before making decisions based on this content. 

The Rising Cost of Petrol vs. The Declining Cost of Electricity 

1. Petrol Prices: A Volatile Expense 

Fuel costs in Australia have been unstable, with petrol averaging $2.10 per litre in 2023, according to the Australian Competition and Consumer Commission (ACCC). With global oil price volatility and increasing taxes, petrol prices are expected to remain high. 

2. Electricity Prices: Becoming More Affordable 

While petrol prices rise, electricity costs are decreasing. The AEMC 2024 report forecasts that residential electricity prices will drop by 13% over the next decade, making EV charging cheaper over time. 

EV vs. Petrol: Cost Comparison 

1. Running Costs: Fuel vs. Electricity 

The biggest financial advantage of an EV is the cost of running it. Here's a side-by-side comparison of fueling costs for a petrol car vs. charging an EV. 

Savings: Switching to an EV saves an estimated $1,800 per year in fuel costs alone. 

2. Maintenance Costs: EVs vs. Petrol Vehicles 

EVs have fewer moving parts compared to petrol cars, which means lower maintenance and repair costs. Petrol engines require oil changes, transmission servicing, and exhaust system maintenance, while EVs eliminate these expenses. 

Savings: Switching to an EV saves an estimated $800 per year on maintenance costs. 

3. Total Ownership Costs Over 5 Years 

Beyond annual fuel and maintenance costs, let's compare total ownership costs over five years. 

EVs are projected to save owners approximately $13,000 over five years compared to petrol cars. 

Government Incentives for EV Owners 

To encourage EV adoption, the Australian government provides rebates, tax exemptions, and grants that make purchasing an EV more affordable. 

Additionally, businesses can claim instant tax write-offs for EV purchases, further reducing upfront costs. 

Are EVs Better for the Environment? 

Aside from cost savings, switching to an EV significantly reduces carbon emissions. According to the Australian Renewable Energy Agency (ARENA): 

• A petrol car emits 2.5 tonnes of CO2 per year. 
• An EV using grid electricity emits 1.5 tonnes of CO2 per year. 
• An EV using 100% renewable energy emits 0 tonnes of CO2. 

EVs powered by solar panels or green energy plans are a great option for households looking to reduce their carbon footprint. 

Common Concerns About EV Ownership 

1. Charging Infrastructure: Is It Convenient? 

As of 2024, Australia has over 4,000 public EV charging stations, with major networks expanding fast. The government is investing $500 million into improving fast-charging access nationwide. 

Home Charging Costs: 

• Standard home charger: $1,000-$2,000 installation 
• Savings potential: Charging at home is up to 80% cheaper than using petrol. 

2. Battery Lifespan & Replacement Costs 

Modern EV batteries last 10-15 years, and most manufacturers offer 8-year warranties. Battery costs have also declined 89% since 2010, making replacements more affordable. 

Final Verdict: Is It Time to Switch? 

Financially? Yes. With potential savings of $2,000 per year in fuel and maintenance, and up to $13,000 over five years, switching to an EV makes strong financial sense. 

Environmentally? Absolutely. EVs produce 50-100% lower emissions than petrol cars, especially when powered by renewables. 

Convenience? Improving rapidly. More charging stations, faster home chargers, and lower battery costs make EVs more practical than ever. 

Key Takeaways: 

• Fuel savings of up to $1,800 per year make EVs a cost-effective choice. 
• Lower maintenance costs ($800+ per year savings). 
• Government incentives reduce upfront costs by up to $6,000. 
• EVs are more eco-friendly, with up to 100% lower emissions. 
• Charging infrastructure is expanding rapidly, making EV ownership easier. 

With increasing incentives and improving infrastructure, now may be a good time to explore whether an EV suits your lifestyle and budget. Compare charging options and total costs to decide if an EV is right for you.