Only if you drive a lot and if that is because you drive long distances an electric car may have range problems
An electric vehicle can be powered with virtually free solar energy, and has much lower maintenance costs than an ICE vehicle.
Because of that, you might be willing to buy an electric vehicle even if it costs more, so long as you save money within a few years. So how long does it take to recoup the extra cost of an EV?
Well, there's no simple answer. It will depend on a range of factors including:
the EV you are considering, and the alternative ICE vehicle you are comparing it to
how much you drive, and how far each time
whether you have excess solar generation at your home, to use for charging.
These factors will determine whether you save money within a few years of buying an EV, or whether you break even at all.
One of the cheapest battery-powered electric vehicles available in Australia is an SUV coming in at about $44,000.
Now, let's say you were tossing up whether to buy that car or a similar SUV made by the same manufacturer — one that runs on petrol and costs about $28,000.
You're paying $16,000 more for the EV. So, over a few years, could you save that $16,000 in fuel and maintenance?
Yes — but you'd have to be a big driver, clocking up about twice the national average of 12,000 kilometres per year.
If you had an EV, and could use your home solar panels to charge your car, you might spend just $2,500 charging your EV and another $3,000 on maintenance over the five years.
If that all works out, you'll be about $500 better off after five years with the EV, compared to the ICE vehicle.
Other EVs on the market start at about $50,000 and go up from there. Making enough savings from fuel and maintenance with those vehicles is going to be harder, depending on what ICE vehicle you're comparing it to.
And the less you drive, the fewer the opportunities for savings. If you drive the car rarely, it's very hard to realise any of the savings from an EV.
This is all based on prices today, but prices are projected to continue their sharp decline. As they do, the equation becomes more and more favourable for EVs.
And when EVs cost the same as ICE vehicles, buying one will for most be a no-brainer.
In Norway, government policies have made EVs already roughly the same cost as ICE vehicles, and as a result, nearly 80 per cent of new car sales are battery electric.