So you want to be good to the environment? Great! But you also want the conveniences of a modern lifestyle? Sounds like you’re pretty normal, and maybe facing a dilemma. Well things might be easier than you think – let’s have a look at whether an electric car is a viable purchase for you right now. The main things we will need to look at are the larger costs of purchasing an electric car compared to the ongoing savings in fuel costs. The reason that fuel costs come into play, is because it is far, far cheaper to run an electric vehicle!
Let’s consider an individual who drives 500km a week. Based on an urban driving cost of around $17.50 per hundred kilometres this would be around $87.50 per week. Let’s push that out to $4558 per year, or $22,793 for a period of five years.
That’s a pretty huge price for petrol alone. Now let’s bring in the electric car for comparison. Travelling in an electric vehicle costs roughly one-tenth of the amount in direct ‘fuel’ costs for a petrol vehicle. This makes our power cost for 500km/week around an estimated $2,279 over a five year period.
We’ve chosen a five year period because five years is a standard fleet vehicle lifetime. But as I’m sure many of you can appreciate, we can hang on to our car for far longer than five years.
The average upfront cost of an electric vehicle will be around $32,000, compared to an average of $14,000 for a comparable petrol powered car. That makes the electric vehicle $18,000 more expensive upfront. Looking back to our fuel costs for a 500km/week average distance, we see a five year saving of $20,514 for the electric vehicle. Based on these high level calculations, the 500km/week user is in a similar cost position over 5 years if they chose an electric car as their next car. Or in other words:
- Five year Electric Vehicle cost = $32,000 upfront + $2,279 travel = $34,279
- Five year Petrol Vehicle cost = $14,000 upfront + $22,793 travel = $36,793
However, what we aren’t calculating here is the extra interest paid on the larger capital outlay to purchase an electric car. This may tip the economic scales in favour of a petrol car, depending on the level of loan required and the inflation rate during this period.
The other factor that we haven’t looked at is maintenance costs. There are a number of variables that play into the relative expenses for petrol and electric cars, but it is generally understood that these are currently roughly equal.
Therefore, given the comparable cost shown in our calculations, and the relatively small impact of the other factors, it is therefore possible to make a strong economic case for medium to high car users to use an electric car. Furthermore, if we double our travelling distance to 1000 kilometres per week, then the argument is overwhelmingly in favour of using an electric vehicle. Noting, however that this level of usage would require the battery to be recharged once during the day (which on current EV models can be taken to 80% in about 30 minutes). Conversely, if we reduce the distance travelled then this reduces the economic attractiveness of an electric vehicle.
Presently, in Australia there are no government subsidies for electric cars purchases. Hopefully this will change in the future and we will see some subsidies for zero emission vehicles, perhaps to the tune of $7500 per car as many other countries have. This will help tip the scales in favour of electric cars over petrol cars for a far greater range of consumers.
So in summary, there’s a few thing to consider here, but it’s fairly reasonable to say that if you spend about $100 a week towards fuel costs then your next car purchase should be an electric one. Happy driving!
This analysis of Electric Vehicles brought to you by Car Care, Australia’s biggest provider of Car Detailing Melbourneservices. For some more car info, you may like to have a browse through this article entitled All Systems Go – 20 Essential Car Care Tips To Keep You On The Road.