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Electric vs. Petrol Cars: Which one is the right choice for you?


Buying a new car has never been easy, we’ve always had to consider our lifestyle, reliability, style and price when investing in our next vehicle. Internal Combustion Engines (ICE) have dominated the market for as long as we can all remember, but the rise of hybrid and electric vehicles has added one more element into the mix to consider.

So, what are all the key differences under the hood of ICE and electric vehicles, and how do they weigh up when buying our next car.

We’re all more than familiar with petrol vehicles that have dominated the market since they were first invented in 1886. Petrol cars use an Internal Combustion Engine that converts energy from the heat of burning gasoline into torque. Torque is applied to tyres, which powers your movement.

ICE vehicles have long been the norm worldwide, however we may start to see the decline of them on our roads in the near future, with countries like the United Kingdom, Norway, Singapore and the Netherlands setting out targets to phase out the sale of non-zero-emission vehicles by 2035.

Electric Vehicles
Electric cars have been around since the 1820’s, however they’ve only recently become a viable option for everyday transport. The surge in EV popularity was made possible by the development of lithium-ion batteries, which have enabled rechargeable batteries that can power drivers through their everyday lives. The majority of EVs we see on the roads these days are lithium-ion battery powered, using nickel manganese cobalt or lithium iron phosphate.

Electric vehicles differ from their hybrid counterparts as they run solely off their rechargeable battery. The average EV can travel up to 450 km on one charge, while top of the line models like the Tesla Roadster claim up to 1000 km driving range. Electric vehicles seem to be the way of the future, with brands like Volvo, Bentley and Lexus having solid plans to phase out ICE vehicles in favour of electric in the near future. The transition to electric has also reflected in consumer sales, with 2023 and 2024 sales figures showing double digit growth in EV purchases.

Purchase Price
Lower purchase price
Price is often a major factor when choosing a new car. Petrol vehicles usually come with a lower initial price tag than their electric and hybrid competitors, with an average price around $30,000. In contrast, the average electric car costs around $88,000. ICE vehicles also offer a significantly broader price range, even more so when you consider a more extensive used car market.

ICE technology has been dominant for so long that manufacturers have optimised production and economies of scale, making these vehicles more affordable. Meanwhile EVs are still receiving substantial investment into technology development, contributing to their higher cost. We’ve already seen lower priced options enter the market, especially from Chinese brands like BYD and MG, but we anticipate seeing a general downward trend in pricing for the foreseeable future.

An initial barrier for the wider adoption of EVs in the Aussie market has been their higher initial purchase cost, with most models on that market in the $60,000 – $90,000 range, averaging almost $10,000 more than the average petrol car. For example, the MG ZS EV is priced at $39,990, relatively affordable for an electric SUV, however its ICE counterpart will only set drivers back $22,990. That $17,000 difference can be crucial for new car buyers, especially if they’re unaware or ineligible for available government incentives. Fortunately, we’re seeing a downward trend in EV pricing, with the cheapest option on the market currently the GWM Ora which starts at $35,990 driveaway.

Running costs
EVs incur significantly lower running costs compared to their fuel counterparts. Drivers can save up to 70% on fuel costs and 40% on maintenance, for the average driver this could mean savings of up to $1,200 annually. On average, petrol costs $1.50 per litre, while the equivalent for an EV is 0.33c per litre. Fuel savings are only bolstered if you have solar panels, where the cost of home charging is significantly reduced or even dropped to zero.

The battery in electric vehicles replaces many of the moving parts in ICE vehicles that require regular servicing and replacement. In totality there are more than 2,000 moving parts in your average ICE vehicle, compared to the 20 in an electric vehicle drivetrain. An EV removes the need for oil changes, coolant flushing, air filter replacements, spark plugs, drive belts, mufflers and distributors, and reduces the need for brake maintenance. The relative simplicity in an EV means less frequent servicing, and fewer parts that need replacement. A common concern for drivers when considering an EV is battery replacement, as replacing an EV battery can easily cost thousands of dollars. However a full battery replacement is rare, with most lithium-ion batteries lasting 10-20 years, with a 10-year or 160,000 km warranty on batteries.

Though the majority of running costs for an EV come out lower than their petrol competitors, there’s one outlier: Insurance. On average, EV drivers pay $661 more to insure their vehicle. Insurers indicate that there are a multitude of reasons this is the case, with EVs being generally more expensive, more complex and the repair industry lagging in adequate training to repair EVs.

Range anxiety is a common concern preventing new car buyers from opting for an EV. The driving range of EVs is a double pronged issue for many drivers. Firstly, current battery technology limits how far an EV can drive on a single charge. The average new model on the Australian market claims about 450 km in driving range, which is more than enough to get the average Aussie around for over a week, however this falls short when you compare the range to an ICE vehicle like a Landcruiser Prado which can take you nearly 1,900 kms on a full tank.

Secondly, the lack of charging stations exacerbates range anxiety. While a fully charged battery can cover a reasonable distance, Australia has yet to fully catch up on charging infrastructure across the country. The fear of being stranded without access to a charging station is significant, especially given that charging a battery without fast-charging capabilities can take hours.

Carbon Emissions
EV’s fight against pollution can be considered their raison d’etre, as 20% of global CO2 emissions originate from road traffic. Electric vehicles eliminate tailpipe emissions, significantly reducing greenhouse gases and improving air quality. Over their lifecycle, EVs can reduce emissions by 40-50%, based on Australia’s current electricity grid, which still uses fossil fuels. Charging with renewable energy sources can further enhance this impact

There is extensive evidence that greenhouse gas emissions from ICE vehicles contribute significantly to global warming and pollution. These emissions include CO2, carbon monoxide, nitrogen oxides, particulate matter, and volatile organic compounds. Besides harming the planet, these pollutants can also cause smog and negatively impact health, leading to heart and lung diseases.

The average petrol car or light SUV emits 149.5g/km of CO2, with large SUVs emitting up to 50% more. In comparison, hybrid vehicles emit an average of 103 g/km, and electric vehicles emit 51 g/km, highlighting the significant differences in emissions over a vehicle’s lifecycle.

It’s undeniable that Australian infrastructure has been built around ICE vehicles as the expectation for motor transport. Most drivers are familiar with their local petrol stations and can easily find one without driving far. The convenience of quick refuelling is a significant advantage for time-pressed drivers. Despite the growing charger network, with 4,943 public chargers currently available, it still lags behind the 6,500 petrol stations across the country.

Charging an EV to full capacity can take hours, posing an inconvenience for drivers who must plan charging times, station locations, and potential wait times. Especially, when we’ve all been accustomed to being able to pick up and go at any time, and be in and out of the servo in 5 minutes.

Driving Experience
Electric vehicles are known for being smoother to run, with a quieter driving experience, greater handling and faster acceleration and capability of higher speed. Electric motors provide instant torque, allowing quick acceleration from the jump and a more responsive drive. The large, heavy battery packs in EVs are typically placed between the axles, lowering the center of gravity and enhancing handling, stability, and responsiveness. The absence of engine and exhaust noise creates an exceptionally quiet driving experience in some EVs.

Government Incentives
The state and federal governments have given plenty of reasons for Aussies to take a dive in the EV pool. The majority of these incentives are mandated at a state level and may include stamp duty exemptions, free or discounted registration for a period of time, interest free loans on EVs and household battery storage systems, flat rate rebates, charger grants and reduced vehicle duty rates.

At the federal level, recent incentives include a tax break for EV owners using their vehicles for work, announced in July 2024. The “New EV home charging rate” allows EV drivers to claim $0.042 (4.20c) per kilometre travelled for work purposes.

In 2022, the Federal Government introduced the Electric Car Discount, exempting EVs priced under the Luxury Car Tax (LCT) threshold from Fringe Benefit Tax (FBT). This means employees can take out a novated lease on an EV, paying for the vehicle and associated running costs (charging, maintenance, tires, insurance, and registration) from their pre-tax salary, with GST credited back. The exemption is paired with the difference in the Luxury Car Tax (LCT) threshold for fuel efficient and non fuel efficient vehicles, as of the 2024-2025 financial year the LCT for fuel efficient vehicles is $91,387, while for other vehicles the threshold is $80,567. This difference means that you can buy a higher priced fuel-efficient vehicle without incurring the LCT tax rate of 33%, and still be eligible for the FBT Exemption. The FBT exemption has saved drivers up to $8,000 per year on electric vehicles, and boosted EV uptake across Australia

So what’s the best option for you?
Ultimately, the best choice between an EV and an ICE vehicle depends on individual preferences, lifestyle needs, and financial considerations. While petrol vehicles currently offer greater range, competitive pricing, and convenience, the trend towards EVs is undeniable, driven by technological advancements, environmental concerns, and supportive government policies. As the market evolves, EVs are poised to become an increasingly attractive option for a broader range of consumers.