The Burrow
Mar 25, 2021
Electric cars are meant to be better for the environment and for your wallet – but are they really the best value for your money?
In Australia, purchasing an electric car is often more than twice the price of their fossil-fuel counterparts.1
As experts in car insurance, we’re always interested in new and exciting car tech. So, to put a dollar figure on the value of an electric vehicle (EV), we looked at an electric, petrol and hybrid version of the same car – the Hyundai Kona SUV.* We compared the purchase price and ongoing running costs to see at what point an EV could start saving you money.
* The hybrid model is not available to buy in Australia as of 23/04/21.
The data revealed that despite there being an almost $30,000 difference in purchase price between the electric and petrol models, the electric counterpart will work out to be cheaper to own and operate in the long run. The catch? You would need to own the car for 16 years before those cost benefits became clear.
It’s a decent setback considering that the average lifespan of a car in Australia is 10.6 years.2
| Costs (AUD) | |||
| Electric | Petrol | Hybrid | |
| Purchase price + Year 1 | $60,909.16 | $33,445.03 | $49,735.39 |
| Year 2 | $63,456.67 | $37,900.05 | $53,745.21 |
| Year 3 | $66,004.18 | $42,355.08 | $57,755.03 |
| Year 4 | $68,551.69 | $46,810.11 | $61,764.85 |
| Year 5 | $71,099.20 | $51,265.13 | $65,774.67 |
| Year 6 | $73,646.71 | $55,720.16 | $69,784.49 |
| Year 7 | $76,194.22 | $60,175.18 | $73,794.31 |
| Year 8 | $78,741.73 | $64,630.21 | $77,804.13 |
| Year 9 | $81,289.24 | $69,085.24 | $81,813.95 |
| Year 10 | $83,836.74 | $73,540.26 | $85,823.77 |
| Year 11 | $86,384.25 | $77,995.29 | $89,833.59 |
| Year 12 | $88,931.76 | $82,450.32 | $93,843.41 |
| Year 13 | $91,479.27 | $86,905.34 | $97,853.23 |
| Year 14 | $94,026.78 | $91,360.37 | $101,863.05 |
| Year 15 | $96,574.29 | $95,815.40 | $105,872.87 |
| Year 16 | $99,121.80 | $100,270.42 | $109,882.69 |
| Year 17 | $101,669.31 | $104,725.45 | $113,892.51 |
| Year 18 | $104,216.82 | $109,180.47 | $117,902.33 |
| Year 19 | $106,764.33 | $113,635.50 | $121,912.15 |
| Year 20 | $109,311.84 | $118,090.53 | $125,921.97 |
So, what makes them so expensive? If it weren’t for the high manufacturing costs, an electric vehicle would be cheaper by a long shot. The above analysis revealed that the petrol-powered Kona cost around 423% more in annual refuelling costs ($2,046) than it did to recharge the electric car ($391.16), even with petrol prices at $2 a litre.
Of course, this is based on calculations for just one type of car, and these figures may vary for other vehicles. A breakdown or spike in the price of fuel will affect the numbers, so use these figures as a guide rather than a hard-and-fast rule.
The scenario shifts when compared with the new BYD Atto 3, which is due to hit Australian shores in July 2022 and has been heralded as one of the most affordable electric vehicles. The BYD Atto 3 becomes more cost effective than the petrol Hyundai Kona after 9 years, which is seven years earlier than the electric Kona.
Electric cars might not be ‘worth it’ from a strictly financial sense right now but it is predicted they will be more affordable in a decade’s time. However, from an emissions perspective, there’s no contest – provided the electricity that powers the car is generated from clean sources.
The process of manufacturing electric vehicles actually produces more carbon dioxide (CO2) than the manufacturing of petrol engine vehicles. However, EVs produce no emissions, and in two years a petrol car will generate more CO2 emissions than its electric cousin will over its lifetime (including the emissions from manufacture).
We used the baseline model to get the cheapest price advertised by Hyundai in Australia for the Kona electric and Kona petrol cars, and the UK price for the Kona Hybrid before converting the currency using XE Currency Converter on 23/02/2022.
To calculate registration, we used the Queensland Government’s transport and motoring registration guide3 to get an estimation of registration renewal costs. Note that a first-time registration could incur higher costs.
The costs of running the petrol and hybrid versions of the vehicle were calculated by combining the vehicle’s range with the average petrol cost of $2.20 per litre, which reflected a common price of petrol in Brisbane in March 2022. We based the annual costs on the assumption the vehicle would be driven 15,000 kilometres per year.
The cost to recharge the electric version was based on an electricity tariff of 20.29 cents per kWh combined with the battery capacity of the vehicle. This electricity tariff represented an average of Tier 1 retailers in Queensland that are on Compare the Market’s panel, based on a single rate tariff that does not take into account solar or supply charges.
Insurance was calculated using Compare the Market’s free comparison service, based on comprehensive insurance for a white 2021 model with no finance or hail damage, garaged in Brisbane and driven by a 31-year-old male with no previous claims in the past five years. We used the quotes available to calculate an average annual figure for the petrol and electric car and set the cost of insurance for the hybrid model in-between these two prices to provide an estimate, based on the fact the cost of the Kona hybrid purchase cost is between that of the petrol and electric version. While it is unrealistic to expect insurance costs to stay the same over an 18-year period we set them at a consistent price for ease of comparison.
Parts and servicing costs were based on average figures from Budget Direct’s article Car Running Costs in Australia 20204 and the Electric Vehicle Council Mythbusting5 page. This was supported by earlier research in an article by Lawrence Fulton in the Applied Sciences journal in 2018, which found maintenance costs for electric cars were roughly half of that of hybrids.6
These figures provided an annual operating cost of:
The figures used in this article are rough calculations based on available data and are intended as a guide and might not include every associated expense related to owning a car. Exact annual operational costs, such as the cost of registration, servicing or refuelling/recharging can change at any time. These calculations are also specific to the 2021 Hyundai Kona models and will differ for other vehicles based on their specifications.
1. Chapter 5: Seizing the opportunity and managing the risks. Select Committee on Electric Vehicles Report, Senate Committees, Parliament of Australia, Australian Government. 2019.
2. Motor Vehicle Census, Australia. Australian Bureau of Statistics, Australian Government. 2020.
3. Registration costs. Department of Transport and Main Roads, Queensland government. 2020.
4. Car Running Costs in Australia 2020. Budget Direct. 2020.
5. Mythbusting. Electric Vehicle Council. 2021.
6. Lawrence Fulton. ‘Ownership Cost Comparison of Battery Electric and Non-Plugin Hybrid Vehicles: A Consumer Perspective’, Applied Sciences. Volume 8 Issue 1487 Pages 1-14.
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