Are EVs cheaper to buy and run than petrol cars, yet?

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Are EVs finally cheaper to buy than the traditional petrol car? Analysis shows they are, particularly with solar.

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One of the major obstacles to people buying EVs (electric vehicles) and PHEVs (plug- in hybrids) is the purchase price. The following table shows the problem:


Basically they are the same car but with different powertrains. However, the Leaf has some superior luxury equipment on board compared with the Pulsar and has better acceleration, especially from a standing start.

The conventional way to work out whether it is worth paying an extra $12,000 for the Leaf is to do a ‘simple payback’ calculation. That approach calculates how many years it will take until the petrol saved equals $12,000 (less the cost of electricity). The main problem with this approach is the assumption that petrol will stay the same price over that number of years. No consideration is given to other factors.

Another approach is to consider what can be called ‘Monthly Cost of Ownership (MCO)’. This leads to quite a different result. It is based on the concept that people budget for monthly car payments.

To purchase a Leaf, a leading car website offers finance through a broker at 7% for 5 years, $0 deposit, with a balloon payment at the end of 40%. That translates to $520 per month. Using the same parameters, the Pulsar ST-S is available for $391 per month.

During operation, the Leaf will use electricity (assume GreenPower) at a cost of around 5.8c/km while the Pulsar will use petrol at a cost of around 16c/km. How many km does a driver have to go, per month, to break even? Graph 1 shows this calculation which is then explained below.

Graph 1: Monthly Cost of Ownership of Nissan’s Leaf and Pulsar


The GreenPower line assumes using 100% renewable energy which includes the small extra cost: most electricity retailers charge an extra 5c/kWh for 100% GreenPower. Alternatively, a savvy driver could buy offsets through STCs, LGCs, Greenfleet, the ATA’s C3 or other offset methods to eliminate emissions from their energy usage.

The PV (PhotoVoltaics, i.e. solar panels) line assumes that the person can put enough charge into their car during daylight to keep them going until the next time they need to re-charge. PV at home is free. PV-linked EV-charging facilities will also be provided by increasing numbers of shopping precincts – IKEA, for example, already offers this service at some of its stores’ parking areas, charged from PV on their roofs. (It makes a lot of sense to keep a person charging their car for free while they linger in the store).

The MCO approach shows that if a car owner has access to free PV, then the Monthly Cost of Ownership of a Leaf will be lower than the Pulsar if they drive more than 800 km per month. If the car owner charges exclusively from the grid using GreenPower, the breakeven point is around 1,000 km per month. Since the average distance driven by Victorians is 1,400 per month, these savings are within reach of the majority of drivers.

These figures do not include the costs of insurance or vehicle registration which are highly variable per location/person. The figures do not include the costs of maintenance either. In all of these cases, the costs for the Leaf should be less than the Pulsar, further easing the breakeven point.

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  1. Hi Bede, It is great to see an article with an Australian perspective on EV ownership. One question, though – in working out the electricity costs, what cost per KWh have you used? There would be huge variations around the country (peak is now 32c per KWh in Qld, and 24c off-peak, inc. GST). These differences would affect the break-even point. As an aside, in purchasing GreenPower Kwh, I’ve found it cheaper to purchase it from C3 per KwH than from my electricity provider, and doing so also supports environmental organisations.

    • PJB Doherty 4 years ago

      Thanks for the questions, Liz. The cost of electricity is based on 29c/kWh. Powershop’s retail rate for GreenPower in Victoria is currently 28.5c/kWh, including GST. If one uses their brownpower rate (23.61c) and offsets with C3 (, one can realise much better savings, as I mentioned in the article – and C3 is also GST-free AND tax-deductible. The article didn’t factor in other more sophisticated savings methods like TOU or REC-trading. Bede

      • Peter Campbell 4 years ago

        Glad you mentioned C3 for cheap Greenpower. Last January I bought a year’s worth to run the house and two electric cars (one 6 year old DIY conversion I drive, one iMiEV my wife drives). Next Jan I’ll do the same again to cover another year’s worth.

        • Yes, C3 is great – I’ve bought C3 Greenpower to cover our power use beyond what our pv system provides, and the same site offers carbon offsets for car and plane use. I was able to offset our two petrol cars for a year for $56, although I’m hoping the next car will be electric, and so watching the electric car offerings in Oz with interest. Thanks for answering my question above, PJB.

  2. kristian handberg 4 years ago

    An interesting perspective on the situation Bede, so well done firstly. I like the idea of framing the cost calc within the household operating budget.
    A few qu’s:
    * Is it fair to include PV/free energy in this calc given that charging will most likely take place overnight when the sun ain’t shinin’?
    * How did you arrive at 16c/km fuel cost for the Pulsar?… this is around 50% higher than what RACV reports for similar sized cars (
    * What’s the actual tariff being used for the GreenPower calc?… off-peak/overnight charging with GreenPower might be around 20c/kWh
    * How do you think depreciation would factor into this calc (noting that it’s the largest contribution to vehicle operating costs/ref RACV link above)?

    • Damien Ellis 4 years ago

      Hey Kristian, I have a leaf and solar panels and charge up during the day and have had no noticeable increase in electricity bills.

      • kristian handberg 4 years ago

        Sounds like it could be a fair inclusion then – how many km’s do you drive per month on average?

        • Damien Ellis 4 years ago

          Probs about 1000 km’s we only do about 30 a day.

    • PJB Doherty 4 years ago

      Thanks for the questions, Kristian.

      1. Some people are able to use PV – for example, stay-at-home parents or work-from-home folks. They may venture out for short trips daily but could be topping their car by day. A trip of 10km uses around 2kWh. If one had a 3kW solar installation on the roof, that would not take much more than an hour to top up, on average, in Victoria (and less on a sunny day).

      2. Glad you asked about the petrol. To be even-handed, one should rate the two vehicles for urban cycle consumption. The reason I used the urban cycle rate is that the Leaf will be used mainly for short urban trips and not for long-distance driving. So I used the published urban cycle rate for the Pulsar ST-S, inflated by 10% to make it realistic.

    • PJB Doherty 4 years ago

      For the electricity tariffs, see the next question below.
      We don’t know how depreciation will affect EVs as there is no history. The question becomes: what does a car requiring little maintenance and cheaper fuel costs (and stable, predictable costs too, esp. if PV) will sell for when the time comes to replace it? Would it be worth the balloon value – $16,000 – in 5 years?

  3. Tim Forcey 4 years ago

    So, Bede, if I am an average driver, driving 1,400 km/month & needing to finance the car & buying green power (not PV), I would save about $600/yr with the EV, correct? So you are saying, for this “average driver” going EV is already a no-brainer? Gee, don’t tell Nissan or they won’t further drop their prices!

    • PJB Doherty 4 years ago

      Yes, that matches my calculations, Tim. And, if you had PV, you could save $1,200 per year for that mileage.

  4. john 4 years ago

    I have heard of a person who built his own DIY electric car and it costs $120 a year in rego and uses his PV and battery system to charge it only travels about 30 km to commute to work so is a total no brainer.

    • Peter Campbell 4 years ago

      I converted a car 6 years ago. It is running just fine still but a low milage iMiEV can be bought for $20K or less now so I would now recommend just buying this nice, well set up commercial car unless you want an interesting project.
      The cost of running an EV, paying a bit extra for Greenpower via C3 (see below), is so low I have not bothered to calculate what it works out to in dollars for quite a few years. What does petrol cost these days? I hardly ever buy any. Only for an occasional trip out of town. When I did the sums my home-brew EV was cheaper to run than any petrol car and now our Mitsubishi iMiEV is a bit more efficient than the DIY car is.

  5. john 4 years ago

    just a comment on the leaf I rang Nissan Australia and told them they will sell it as they had not heard about the vehicle I was on list to be first buyer. Later they wanted $52k when I could buy it; while I could buy it in Japan, Europe or the USA for $32k in Aussie dollars needless to say I was just a tad disappointed at their front loading of the price.

    • Peter Campbell 4 years ago

      A friend bought a Nissan Leaf a year or so back from one Nissan dealer that was happy to sell it to him after the other Nissan dealer in town had seemed uninterested in the vehicle or selling it. Now he tells anyone who will listen which Nissan dealer to go to!
      I had a similar experience making enquiries with different Mitsubishi dealers. The one who sold me an ex-demo iMiEV now tells me he is selling more of the plug-in hybrid versions of the Outlander than he sells of the diesel versions.

      • john 4 years ago

        mate the dealers hate selling these cars because there is zero service that is where they make their payback in fact they can sell a ICE vehicle at a loss and are quiet happy because of the service fees it generates

        • Tim Forcey 4 years ago

          Yes, when I viewed “Who Killed the Electric Car?” and they listed all the suspects at the end of the film, the lack of maintenance struck me as the main reason. Too little grease involved!

  6. Michael Dufty 4 years ago

    Does this factor in the 40% balloon payment at the end being higher on the leaf, or are you assuming this is balanced by the car being worth more?

  7. Malcolm Scott 4 years ago

    if the objective is carbon free energy, then renewable rather than GreenPower is an
    option. My Holden Volt runs very well on 14c off-peak renewable Momentum Energy on a flexible pricing tariff. It also runs very well from the charging stations around Melbourne as a result of Kristian’s earlier work. Thank you :).

    Otherwise it will be very interesting to view once public the Pitt and Sherry report
    conducted by Moreland Council on Leaf lifecycle costing vs Camry Hybrid. The same methodology might be applied to the Outlander PHEV vs all those 4WD diesel crew cabs chosen for modest AWD use vs other SUVs.

    One problem with these cost analyses comparisons is that if cost is the determining
    factor, there are many lower cost vehicles to compare with rather than a Nissan
    Pulsar ST-S, which is the hurdle often put to me when arguing the business
    case. That is why the Outlander PHEV is so attractive for some operational roles/charging scenarios with it’s price much closer to the ICE variant than the normal +-$15,000 delta

    • Ralf 4 years ago

      Hi Scott,
      I have just bought a Volt. You mentioned charging stations around Melbourne. How can I find out about these? And is there a Volt “Club” to exchange experiences? Cheers, Ralf

  8. Greg Churm 4 years ago

    I have done the same calculation Leaf versus Prius. They cost about the same but running costs assuming off peak 100% green charging mean the Leaf costs half as much to run as a Prius. I have a Prius and it has averaged 4.1l/100km since I bought it 2 years ago which translates to 15.48km/$1 The Leaf should do about 5.5km/kWHr, Off Peak 100% green is 16.274 cents/kWHr. This translates to 33.80km/$1. The reason I am not driving a Leaf is because they dropped the price to Prius territory 2 months after my purchase. I am still a little peeved.

  9. Professor Ray Wills 4 years ago

    Here’s the calc on my Nissan Leaf from earlier this year just after I hit 15000km – over 15000 km on 2750 kWh = $715 vs $2000+ fuel

    I’ve now now done 21000 km –

    check out the graph

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