With the end of fuel subsidies, are electric vehicles synonymous with long-term savings?

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This week will see the end of the federal government’s temporary fuel excise duty reduction on September 28, 2022. Projections call for fuel prices to increase to 25.3 cents per litre, which will lead to an increase in about $15.18 for a 60 liter tank of gas.

The cuts were a six-month measure put in place to ease consumer stress as fuel prices rose amid political unrest in Ukraine, upcoming federal elections and Covid-19 supply chain issues. Despite pressure to extend these measures with the cost of living crisis, the reinstatement of full excise duty on fuel is leaving many Australians feeling they will not be able to afford to fill up.

While the ACCC is ready to watch abnormal increases the day after the 28th, the rise in fuel prices raises the question: are electric vehicles (EVs) cheaper in the long term?

Are you ready to save with an electric vehicle?

The limited range of electric vehicle models in Australia – and the higher ticket price – means upfront costs can be much higher than equivalent petrol vehicles. This can be a major deterrent for consumers, along with limited infrastructure to support electric vehicle charging and the high cost of energy.

That said, electric vehicles – especially battery electric vehicles, or BEVs – have been shown to be considerably cheaper to run than comparable combustion-engined cars (especially if charged off-peak or paired with renewable energy to recharge). The Electric Vehicle Council estimates the average running cost of a gas-powered car at $14/km, while the average electric vehicle is around $4/km. Evenergi research has estimated that a $5,000 difference of ownership costs between electric vehicles and gasoline compared over 5 years.

These savings are not only for the pump, but also for the mechanic. Since electric vehicles have far fewer moving parts than a conventional engine, you can save up to 40% on maintenance costs. Of course, it’s hard to get your hands on a new car at the moment, let alone an EV – but it’s getting more and more of an incentive.

How to buy an electric vehicle?

If you’re considering switching to an electric vehicle, you might want to consider auto loans designed specifically for electric and hybrid vehicles. With ambitious goals of phasing out new gas-powered vehicles in favor of green cars, many lenders are offering some of their best interest rates on loans for electric vehicles or cars that meet sustainability standards.

In the meantime, if gasoline is your go-to, try to keep costs down. Some brands offer membership discounts that can turn out to be attractive when added together. You can also keep an eye out for a gas price cycle trackingas well as individual applications for different states (New South Wales, HER, Washington, Tasks, QLD, NT – not currently offered by Vic or ACT) to avoid being overloaded.

Did this story get your engines running? Check out our picks for the best car loans from Mozo to find the best ones. Stop by our Green Finance Center to find more ways to save sustainably.

^ See Mozo Experts Choice Personal Loan Awards information

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