How much more expensive are electric cars?

Electric vehicle models currently carry a higher upfront price tag than traditional internal combustion engine (ICE) models. But, as new car prices continue to climb with every generation, refresh or year, how much more expensive are EVs today?

Due to the higher cost of producing large lithium-ion battery packs that contain rare earth minerals, pure electric cars are often pricier than their petrol- and diesel-powered equivalents.

Some brands, such as Volkswagen, have begun to talk about their incoming EVs having a price point similar to the higher-spec variants in their combustion-engined lines, while most insist that little can be done until governments prioritise the issue.

In the here and now, though, how do EVs compare on price – and what do buyers consider the most important factors in the purchase decision?

JUMP AHEAD

• What's an affordable EV?
• Depreciation: EVs v ICE cars
• Will EVs ever be cheaper than ICE cars?
• COMPARED
  • MG ZS EV
  • Tesla Model 3
  • Tesla Model Y
  • Kia EV6
  • Porsche Taycan
• And so..?

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According to a consumer study of 506 Australia motorists, almost 70 per cent believe the purchase price of electric cars is the main barrier to adoption.

Further, the survey suggested 13 per cent would be unwilling to buy a zero tailpipe emissions model if it was priced below $55,000 drive-away. At the time of writing, only three EVs fit that budget: the MG ZS EV, BYD Atto 3, and Nissan Leaf.

(Study carried out by insurer Compare the Market. Wheels Media has no relationship with this business. More on survey data validity: How are survey sample sizes determined?)

Some states have also introduced incentives and limited rebates for purchasing a pure-electric car under a certain price threshold, but EV taxes are poised to be introduced from 2027 (or when EVs have a larger market share).

Victoria is already charging owners by distance driven annually. Additionally, electric car depreciation varies depending on the model.

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How does EV depreciation compare to combustion-powered cars?

According to Redbook – which tends to give more conservative estimates – a used 2012 Nissan Leaf with 100,000km to 180,000km on the odometer will have lost at least 78 per cent of its value if sold today.

In comparison, a 2012 Hyundai i30 Premium with a petrol engine, automatic transmission and 150,000km to 250,000km used has depreciated by at least 56 per cent.

In contrast, Carloop data reveals a 2015 Tesla Model S 70 with nearly 75,000km driven loses 39 per cent of its value after six years – compared to a diesel-driven 2015 BMW 530d with around 63,000km on the clock depreciating by 60 per cent over the same period.

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Will EVs ever be cheaper than combustion-powered cars?

It may be some time before electric vehicles are cheaper to buy than internal combustion-engined vehicles, but advocates for the technology will generally focus on lifetime costs when comparing EVs to 'ICE' cars.

Despite the (often much) higher sticker price, EVs theoretically have lower running costs due to more affordable electricity ‘fuel’, better efficiency, and generally cheaper servicing expenses.

This all contributes to offsetting the extra price premium over time, as owners drive the vehicle further.

Replacing an individual battery module is also cheaper than maintaining an entire combustion engine. It's important to note that battery packs rarely fail completely, and can increasingly be rejuvenated by replacing individual cells in the pack.

It’s worth noting, however, that insurance premiums are currently higher, due to the burgeoning repair market.

Comparisons

Best Electric Cars Under $65k: Affordable EVs Rated

Welcome to part one of three price-based EV buying guides, this one focused on the most affordable electric cars available in Australia today

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Over time, gradually decreasing mineral costs, new battery developments (like the lithium-iron-phosphate (LFP) chemistry), and increased competition in the market – which could be propelled by the federal government setting stricter carbon emissions reduction targets – will mean the initial cost barrier to owning an EV will eventually be on par with a conventional combustion engine model.

For now, let’s compare how much more expensive (or not) EVs are in 2022.

NOTE: Prices are before on-road costs (unless otherwise stated) and accurate as at the time of writing. Models are chosen based on the most comparable size and variant specifications.

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MG ZS EV

The MG ZS EV remains the cheapest new electric car in 2022, receiving a major facelift that brings a larger LFP battery, easier-to-open front charging port, new technology features and more.

*Drive-away price offer
**Based on prices before on-road costs

Now available in two variants, the base ZS EV Excite is exactly $14,000 drive-away more expensive than its turbocharged petrol twin, the ZST Excite.

Meanwhile, it’s $11,200 pricier than the popular Mazda CX-30 G20 Evolve crossover based on pricing before on-road costs are factored in (MG quotes a $43,990 before on-roads price for the ZS EV Excite).

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However, unlike both petrol models, MG only requires the ZS EV to be serviced every 24 months/20,000km, with the first five services averaging to around $376 per visit.

That’s compared to the ZST and CX-30 averaging at $314 and $347 respectively for the first five checkups – but both demand double the servicing frequently at 12 months/10,000km.

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Tesla Model 3

The Tesla Model 3 is the best selling EV in Australia as the American company’s cheapest model offering.

Despite several price rises mounting to $6000 this year for the base Model 3 rear-wheel drive (RWD), it’s still $13,400 cheaper than the latest fifth-generation Mercedes-Benz C-Class (W206) in entry C200 guise.

That’s because the mild-hybrid petrol driven German sedan is $12,000 more expensive than its predecessor, though Mercedes counteracts this with more standard equipment worth a claimed $10,000.

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Likewise, the Model 3 RWD is $13,400 cheaper than the facelifted BMW 3 Series in its base 320i variant. For the 2023 model-year, it now costs $5400 dearer compared to the pre-update model.

Both Tesla and BMW adopt a condition-based servicing scheme where specific routine maintenance tasks are recommended. Mercedes requires service visits every 12 months/ 25,000km.

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Tesla Model Y

The Tesla Model Y medium crossover is poised to overtake its very own Model 3 sedan as the most popular EV in Australia, with a more practical hatchback boot opening and elevated seating position.

Comparing entry-level grades, the pure-electric Model Y RWD is $19,310 more expensive than the updated mild-hybrid petrol Volvo XC40 Plus B4.

However, an arguably more like-for-like comparison in terms of performance would be the Swedish company’s top-spec XC40 Ultimate B5 Dark that starts from $63,990 before on-road costs. In this case, the Tesla is still $8310 (11.5 per cent) dearer than the Volvo.

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Additionally, the Model Y RWD costs $21,700 higher than the popular Audi Q3 in base 35 TFSI form.

Although this is yet another Tesla on this list, for context the single-motor Volvo XC40 Recharge Pure Electric SUV is just $690 more than the Model Y, from $72,990 before on-roads.

Tesla uses condition-based servicing, while Volvo and Audi demand checkups every 12 months/15,000km and offer prepaid service plans.

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Kia EV6

The Kia EV6 crossover is now the South Korean brand's flagship model, overtaking the V6-powered Stinger liftback.

As such, the EV6 Air trim has the widest price gap compared to its petrol counterparts in this story, costing $35,590 more than a Kia Sportage SX with similar equipment levels.

The base model of our 2022 Car of the Year award winner is also $32,140 dearer than the popular Toyota RAV4 GXL Hybrid – both of which, coincidentally, are currently experiencing similarly long wait times of up to two years due to high demand and limited supply.

The Kia EV6, Sportage and Toyota RAV4 all require servicing every 12 months/15,000km, with the first five visits averaging to about $218 versus $479 and $230 respectively.

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Porsche Taycan

The Porsche Taycan remains one of the best-selling electric cars in Australia despite its lofty price tag. The Stuttgart carmaker even sold more Taycans than the iconic 911 globally in 2021.

In its base Taycan trim, it’s $101,000 cheaper than its entry-level 911 Carrera counterpart, although the latter is quicker off the line.

For context, the mid-spec Porsche Taycan GTS starts from $240,300 before on-road costs, compared to the equivalent 911 Carrera GTS priced from $334,900. That’s a $94,600 (28.2 per cent) jump for opting for the petrol-powered coupe.

Additionally, the base Taycan is just $400 cheaper than the BMW M4, though it’s worth noting that this entry Bavarian coupe variant is exclusively offered in a manual transmission.

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The all-electric Porsche Taycan requires servicing every 24 months/30,000km after the first 12 month/15,000km is completed. Meanwhile, the Porsche 911 needs maintenance every 12 months/15,000km.

Servicing prices are set by each Porsche dealer. For example, Porsche Centre Sydney South quotes the Taycan costs $395 for each checkup, while the 911 averages to $977 for the first five visits interchanging between an oil maintenance and a major inspection.

BMW adopts a condition-based servicing scheme.

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How much more expensive are EVs really?

With increasing new car prices, the premium for some electric car models isn't as drastic as comparable combustion-engine models. For the Tesla Model 3 and Porsche Taycan sedans, it is actually cheaper, while the MG ZS EV and Kia EV6 crossovers have a wider price gap – a difference that highlights where the manufacturing costs and margins begin to merge.

However, the upfront purchase price is just one part of the story, often forgotten when 'sticker shock' is so pervasive.

The total cost of ownership, which includes electricity or fuel running costs, insurance, maintenance and depreciation, are key factors to consider as well.

Currently, the running costs and maintenance expenses favour EVs, even when charged on more expensive public charging infrastructure. But if you can charge at home and take advantage of solar energy, then ‘fuel’ can almost be free. Of course, the longer you own and the further you drive an EV, you can eventually recoup the extra price premium.

Despite the price tag barrier, the potential for legislating fuel efficiency standards, more competition in the market, and gradually decreasing battery costs will mean electric cars will soon become more attainable in Australia.

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Further reading

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