Will electric vehicles ever be more cost effective than their petrol counterparts?
- New electric car owners could be waiting more than a decade to see the cost benefit of their purchase, new Compare the Market research shows
- The manufacture of electric vehicles produces higher emissions than petrol, but just two years of petrol car use will generate more emissions than an electric vehicle in its lifetime
Picture the time it takes a child to complete their education – from their first day of kindergarten through to the graduation cap throw at the end of high school.
If you bought an electric car today it’d take just as long to become more cost effective than their petrol guzzling counterparts, according to new research from Compare the Market.
The comparison site analysed the average lifetime running costs of an electric vehicle, compared with petrol and hybrid models of the Hyundai Kona SUV to determine the most affordable model over time.
The data revealed that despite there being an almost $17,000USD difference in purchase price between the electric and petrol models, the electric counterpart works out to be cheaper in the long run. The catch? You would need to own the car for 13 years before those cost benefits became clear.
By comparison, the average lifespan of a car in the United States is just less than 12 years.
Electric vs petrol vs hybrid: Costs and emissions over time
| Costs ($USD) | CO2 emissions (tonnes) | |||||
| Electric | Petrol | Hybrid | Electric | Petrol | Hybrid | |
| Purchase | $37,390.00 | $20,500.00 | $33,238.00 | 13.00 | 10.50 | 13.00 |
| Year 1 | $39,064.62 | $23,540.10 | $35,805.00 | 13.00 | 12.72 | 14.68 |
| Year 2 | $40,739.24 | $26,580.20 | $38,372.00 | 13.00 | 14.94 | 16.36 |
| Year 3 | $42,413.86 | $29,620.30 | $40,939.00 | 13.00 | 17.16 | 18.04 |
| Year 4 | $44,088.48 | $32,660.40 | $43,506.00 | 13.00 | 19.38 | 19.72 |
| Year 5 | $45,763.10 | $35,700.50 | $46,073.00 | 13.00 | 21.60 | 21.40 |
| Year 6 | $47,437.72 | $38,740.60 | $48,640.00 | 13.00 | 23.82 | 23.08 |
| Year 7 | $49,112.34 | $41,780.70 | $51,207.00 | 13.00 | 26.04 | 24.76 |
| Year 8 | $50,786.96 | $44,820.80 | $53,774.00 | 13.00 | 28.26 | 26.44 |
| Year 9 | $52,461.58 | $47,860.90 | $56,341.00 | 13.00 | 30.48 | 28.12 |
| Year 10 | $54,136.20 | $50,901.00 | $58,908.00 | 13.00 | 32.70 | 29.80 |
| Year 11 | $55,810.82 | $53,941.10 | $61,475.00 | 13.00 | 34.92 | 31.48 |
| Year 12 | $57,485.44 | $56,981.20 | $64,042.00 | 13.00 | 37.14 | 33.16 |
| Year 13 | $59,160.06 | $60,021.30 | $66,609.00 | 13.00 | 39.36 | 34.84 |
| Year 14 | $60,834.68 | $63,061.40 | $69,176.00 | 13.00 | 41.58 | 36.52 |
| Year 15 | $62,509.30 | $66,101.50 | $71,743.00 | 13.00 | 43.80 | 38.20 |
| Year 16 | $64,183.92 | $69,141.60 | $74,310.00 | 13.00 | 46.02 | 39.88 |
| Year 17 | $65,858.54 | $72,181.70 | $76,877.00 | 13.00 | 48.24 | 41.56 |
| Year 18 | $67,533.16 | $75,221.80 | $79,444.00 | 13.00 | 50.46 | 43.24 |
To view more data, including a comparison against the same set of statistics based against data from Australia, visit comparethemarket.com.au.
So, what makes them so expensive? If it weren’t for the high manufacturing costs (almost 50% higher than that of a petrol vehicle), they would be the cheapest by a long shot. Compare the Market found that in the US, the petrol-powered Kona cost around 300% more in annual refuelling costs ($1,076.25USD) than it did to recharge the electric car ($270).
As for the hybrid equivalent, the purchase price sits between the other two models at $33,238. The long-term running costs exceed that of the EV after just 5 years of ownership, however they never become more affordable than the petrol model.
Emissions also play a big part in many consumers’ purchasing decisions. Compare the Market found that at 13 tonnes each, the process of manufacturing both hybrid and electric vehicles actually produces more carbon dioxide (CO2) than the manufacturing of petrol engine vehicles (10.5 tonnes). However, EVs produce no emissions, and in just two years a petrol car will generate more CO2 emissions than its electric cousin will over its lifetime (including the emissions from manufacture).
Hybrid car emissions don’t drop below that of petrol until approximately 4 years after purchase.
Data released by non-profit organisation Veloz earlier this year revealed that US EV sales in the first quarter of 2021 were 35% higher than the same period in the previous year. Australia, by comparison, had a 169% increase YoY for Q1 and Q2 combined.
Despite the rising number of EVs on our roads, the question of affordability remains. Forbes reports that rapid battery innovations are reducing the manufacturing costs at such a rate that they will be significantly cheaper to buy in just a few years.
When that finally happens, electric cars will pay off much sooner. A win for the environment and your hip pocket!
To find more information on the costs and emissions of EVs, petrol and hybrid cars including a comparison across the US and Australia, visit https://www.comparethemarket.com.au/car-insurance/electric-vs-petrol-value/.
-ENDS-
For interviews and more information, please contact:
Hannah Norton | +61 417 993 986 | e: hannah.norton@comparethemarket.com.au
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