With almost 20 million registered motor vehicles, Australia is known to be a nation of drivers. Yet so far, we’ve been one of the slower countries to adopt electric vehicles (EVs).
Car manufacturers around the world are investing in the research and development of new EVs. And several countries, including the UK, India and China, have committed to phasing out the sale of new petrol and diesel cars.
But the market for EVs down under is growing. Australians bought about 6,700 EVs in 2019, tripling sales from 2018, according to the Electric Vehicle Council. Meanwhile, combustion engine vehicle sales fell by 7.8%in 2019.
What are the main types of electric cars?
There are generally three main types of EVs:
Battery electric vehicles (BEVs) – With no fuel engine and running completely on electricity, these are the true electric cars. They are charged by an external electricity source, where the car is plugged in.
Plug-in hybrid electric vehicles (PHEVs) – For these cars, a hybrid of fuel and electricity is used. These vehicles have both an electric engine and an internal combustion engine. The electric engine is charged like a BEV using a plug. Because it can also run on fuel, these usually have a longer driving range than BEVs.
Hybrid electric vehicles (HEVs) – Similar to PHEVs, HEVs also combine fuel and electricity. The difference is that rather than plugging in to an electrical charging outlet, HEVs generates power through its braking system. Essentially, it charges while it is being driven.
How much is it to buy an electric car?
The upfront cost to buy an electric car is generally higher as production is still not on a wide scale yet and the price of batteries isn’t cheap.
Among the cheaper EVs you can buy in Australia is the Hyundai Ioniq Plug-in hybrid premium sedan (PHEV), starting from about $46,000.
And Aussie EV startup ACE’s BEVs come in at about $40,000 to $45,000 but are only available to business customers at this stage.
The good news is the price of EVs is likely to match that of internal combustion engine (ICE) vehicles, or regular fuel cars, by the mid-2020s, according to the Electric Vehicle Council.
This will largely be thanks to falling battery costs as lithium mining surges to service growing demand for EVs. Interestingly, Australia is the world’s biggest lithium supplier.
But until the purchase price of EVs comes down, the benefit of lower running costs could outweigh an EV’s hefty price tag in the long run for some regular drivers.
For instance, an EV is estimated to cost 5 cents per kilometre to run, while a fossil fuel vehicle could set you back triple the amount at 15 cents per kilometre, Electric Vehicle Council figures show.
Keep in mind the actual cost savings will depend on the vehicle you have and how often you drive. But if you were to drive the national average of 12,600 kilometres a year, you could save an estimated $1299 annually. And in five years, that adds up to nearly $6,500 – money you could probably use to pay off your car loan.
Are there car loans for electric cars?
If you’ve given some thought on what kind of EV you might buy, it’s also important to think about how you might pay for your new wheels.
In a sign that interest in EVs is picking up here, green car loans are beginning to appear in Australia, though the landscape is particularly empty at the moment. These car loans are specifically for environmentally friendly vehicles.
RateCity’s rate tracking database currently shows what is likely the most compelling green car loan around, with Loans.com.au’s Green Car Loan offering an advertised rate of 3.97% and a comparison rate of 4.51%, compared to other car loan rates. which can be much higher.
Green car loans generally have lower interest rates than regular car loans, as lenders try to incentivise the purchase of cars that are good for the environment. These incentives can sometimes also apply to second-hand eco-friendly cars. Lenders may also waive certain fees and be more flexible with features, such as enabling you to make extra repayments for free.
If for whatever reason your electric car doesn’t meet your preferred lender’s criteria for green car loans, you could go for a regular car loan. Many lenders have lower interest rates for new cars, so if you’re buying a new EV, chances are you’ll still get a reasonable rate.
And there’s always the option to pay cash upfront if you have the funds, which could save you potentially thousands in interest costs and loan fees in the long run.
Are there government incentives to buy electric cars?
There’s another way that EV drivers can save money, and that’s thanks to government incentives. China and European countries are known to have better incentives for EVs than Australia, according to the Electric Vehicle Council. But that doesn’t mean there’s no government support out there.
Here’s some of the ways state and territory governments are rewarding the take-up of EVs.
- NSW – Depending on your EV and, if hybrid, how much carbon dioxide it emits, you may pay less in registration costs.
- VIC – Drivers of BEVs, hybrid vehicles and hybrid heavy vehicles get $100 off their registration fees.
- QLD – BEVs, PHEVs and HEVs have a registration duty rate of 2% up to $100,00. In comparison, four-cylinder vehicles in the same price bracket have a registration duty rate of 3%.
- ACT – EVs may be entitled to a 20% discount off annual registration fees. This discount doesn’t apply to HEVs. Also, under the territory’s Vehicle Emission Reduction Scheme, the less carbon dioxide your car emits, the less you pay in vehicle stamp duty. BEVs pay $0 in duty when buying the car.