Are electric cars cheaper to run than petrol or diesel cars?

The results are in – electric cars may be more expensive to buy, but they are much cheaper to own, according to exclusive new data.

Drive’s 2023 Ownership Costs survey has confirmed what EV owners already knew: electric vehicles may be more expensive to buy, but they are definitely cheaper to live with.

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Australians spend $4815 per year to keep their vehicle running on average, the Drive survey revealed. This equates to $92.35 every week.

Fuel or electricity accounts for up to 38 per cent of that, or an average of $1813 per year.

Comprehensive insurance is the second-biggest expense, taking $1697 (35 per cent), followed by vehicle registration at $878 (18 per cent) and servicing costs at $427 (nine per cent). 

Driving an electric vehicle will save you between $1320 and $3070 every year on average compared to petrol, diesel and hybrid-powered cars, the data revealed. 

An electric vehicle recharged exclusively on solar power will save between $820 and $2570 in fuelling costs. Electric vehicles are also cheaper to service by an average of $465 over the first three years.

Driving an electric vehicle could save you between $1320 and $3070 every year, compared to other types of cars.

But electric vehicles are more expensive to buy initially. They’re also more costly to insure by an average of $661 per year, the data confirms. 

Drive surveyed almost 1000 new passenger cars, SUVs and light commercial vehicles on sale in Australia today, obtaining fuelling costs, insurance premiums, servicing and registration fees to reveal what Australians pay to keep a new car on the road during the first three years of ownership. 

The vehicle’s purchase price was not taken into account, nor were any costs associated with financing the purchase. 

The cheapest new car to run during the first three years of ownership is the Toyota Yaris Hybrid costing just $257.74 every month, totalling $9278 for the first three years of ownership. 

At the other end of the scale, the Nissan Patrol V8-powered large SUV costs $722.60 every month, or just over $26,000 over the first three years.

Electrified vehicles filled eight of the top 10 positions, comprising two pure EVs and six HEV hybrid petrol-electric cars. 

The cheapest electric cars to run

The highest-ranked EV in Drive’s 2023 Ownership Costs survey is the Hyundai Kona, coming in second overall with a weekly bill of just $59.99, or $260.65 per month.

That figure assumes the owner recharges domestically using the grid because they do not have solar charging installed (see more about how we calculated here). If the owner does have solar and charges exclusively during daylight hours, the Hyundai Kona’s monthly running cost drops to $221.

While the Kona EV’s charging costs of $1415 and service costs of $540 over three years are considerably less than an equivalent ICE small SUV, the vehicle’s retail price drives insurance premiums up and the car’s weighty battery pack puts it in a higher vehicle registration bracket.

In fact, the Hyundai Kona Elite’s $54,500 retail price is bettered by seven other EVs, but its insurance premium is the best of all the electric vehicles we surveyed, as is its 14.3kWh/100km electricity efficiency.

The second-cheapest EV to run is another Kona, the slightly more expensive Highlander, which carries a higher insurance premium. 

Third is the GWM Ora EV in standard range specification. The GWM Ora is a relative newcomer to our roads, launching in April 2023. Clearly, its affordable nature will increase its appeal to prospective buyers.

The GWM Ora was the third highest ranking EV in our best value cars survey.

Fourth is another recent arrival, the Cupra Born EV from the Volkswagen Group. Cupra calls the Born a hot hatch, but its performance is more mild than wild. Still, at $64.85 per week to run, it’s an affordable proposition for those with $60,000 to spend.

Rounding out the top five EVs is the Hyundai Ioniq 6 streamliner sedan. This sibling to the Hyundai Ioniq 5 hatchback takes full advantage of its sleek profile to reduce wind resistance and improve energy efficiency to an equal best for EVs of 14.3kWh/100km.

The makeup of the overall top 25 confirms that buying a car with partial or full electrification is the best way to save thousands of dollars during the first three years. 

In all, 18 of the Top 25 best value cars have some form of electrification; seven are pure electric vehicles and 11 are petrol-electric hybrids.  

Other pure electric vehicles in the Top 25 are the GWM Ora hatchback (16th), the Cupra Born hatchback (17th), the Hyundai Ioniq 6 mid-size sedan (19th), the Nissan Leaf (21st) and the Mini Hatch (24th).

The highest-placed Tesla is the Model Y in 60th, costing $310 per month, and the first Tesla Model 3 comes in at 137th with a cost of $329 per month.

The Tesla Model Y ranked 60th in our list of Australia’s best value cars.

What’s the cost of charging an electric car at home with solar?

The Hyundai Kona EV is the top-ranked battery electric vehicle in our survey, coming in second overall with a weekly running cost of $59.99. The Kona costs $3127.82 to keep on the road, just $35 more than the top-ranked Toyota Yaris SX Hybrid. 

Each year the Yaris will consume $821 in petrol at a miserly 3.3L/100km, compared to the Kona’s annual charging bill of $471.66 at an also relatively miserly 14.3kWh/100km.

The Kona’s energy figure assumes that owners charge at home at a 22c/kWh, which is a mid-range domestic tariff in Victoria and at the lower end of the scale in NSW. 

We know that many EV owners charge using solar and also take advantage of ‘free’ charging at the office (somebody has to pay, but it’s probably not the EV owner). However, we’re also aware that retail charging networks currently cost anything between 45c/kWh and 80c/kWh.

So, for our calculations, we used 22c/kWh as a fair middle ground between solar charging and convenience charging.  

Solar panels might provide free power in the long run, but you have to consider the upfront costs.

If we remove recharging fees altogether from the Kona’s weekly running costs, the savings would amount to $9 per week, giving the Kona EV a weekly running cost total of $50.94, comfortably ahead of every other vehicle in the survey. 

However, solar isn’t really free. It needs to be installed first, and this $1415 saving over three years is barely one-quarter of the standard 6kWh solar installation cost.

But what this shows is that if you can charge your EV mostly during daylight hours on a pre-installed solar array, then it is guaranteed to be cheaper to own than a hybrid or ICE car. 

Even if you have to pay for a solar installation, it has the potential to pay itself off in 4-5 years.

To see all the other categories and cars tested, follow the link to get your comprehensive guide to the Best Value Cars in Australia in 2023.

The post Are electric cars cheaper to run than petrol or diesel cars? appeared first on Drive.