Is an EV right for you?

The short answer is yes for the following reasons:

• They produce no tailpipe emissions, so improve air quality. Particulates from vehicle emissions have been reported to cause over 11,000 indirect, and 1,200 direct deaths in Australia per year.
• While the manufacture of EVs has a higher initial carbon footprint, this is offset within two to three years of driving. After that, their combined production and operating emissions are lower than those of comparable petrol and diesel cars. Over the typical lifetime of a vehicle, the environmental benefits are even greater. 
• As electricity grids use more renewable energy, the environmental benefits of EVs will increase.

Compare vehicles and fuel costs on the Australian Government’s Green Vehicle Guide.

• The upfront cost of EVs may be higher for some segments, but operating costs are lower.
• Using a novated lease can make EVs more affordable, with potential savings on tax and running costs.
• Government rebates are available to reduce the purchase price of eligible EVs. 

EVs purchased using a novated lease are exempt from paying Fringe Benefits Tax (FBT) if your choice falls below the FBT threshold. This means the weekly ownership costs on a $60,000 EV under a novated lease could be lower than those on a $38,000 Internal Combustion Engine (ICE) car (see publicly available novated lease calculators).

Purchasing an EV under a novated lease means entering into an agreement with your employer and a novated lease company, who make lease and operating cost repayments for your car from your pre-tax salary. Speak to your employer about novated lease arrangements.

The table below provides an example of the weekly novated lease costs for comparably priced petrol and EVs. These approximate costs were derived from publicly available novated lease calculators. The costs cover everything associated with owning your car, including vehicle finance (loan repayments), maintenance, comprehensive insurance, registration, replacement tyres, and fuel or electricity to run your car.

Figures in the table are an indication only and should not be taken as financial advice. The actual costs will vary depending on your personal circumstances, including your taxable income, how far you drive each year, and costs associated with your novated leasing company. You should seek independent financial advice to determine if a novated lease is right for you.

These examples assume an annual salary of $80,000 and travelling 15,000 km per year*.

*Information is current as of June 2024 taken as the average of selected publicly available lease calculators

After a novated lease ends (you can set the term of the lease up to five years), you have a few options. First, you can purchase the car outright, the amount being a set percentage of the car’s original purchase price. Other options include trading in the car and starting a new lease with a different car or renewing the lease with the same car for another term. The availability of these options may vary depending on your lease provider. 

• Purchase price: The initial purchase price of an EV varies based on model and manufacturer. Brand new EVs start at under $40,000 with higher-end models exceeding $100,000. Cheaper, second-hand EVs are also increasingly available in WA as EVs increase in popularity.
• Tax benefits: EVs priced below the FBT threshold can be purchased using a novated lease. All the costs of owning and operating an EV can then come from your pre-tax income.
• Rebates: The State Governments Zero Emission Vehicle (ZEV) Rebate is available to reduce the initial cost of EVs by $3,500 for cars priced below $70,000. This does not extend to electric motorcycles.
• Running costs: The Electric Vehicle Council estimates that on average it costs 14 cents per km to run a petrol car and only 4 cents per km to run an EV. EVs have fewer moving parts compared to petrol or diesel vehicles, which costs less to maintain, saving about $300 to $400 per year on servicing.
• Home charging: You can charge at home using a standard power socket if available; however, this will charge your vehicle at a slow rate. If you wish to install a dedicated home EV charger to charge at faster rates this may cost between $500 and $2,500 for the wall charger itself, and installation costs between $500 to $2,000. You may also need extra charging cables and plugs which can cost between $150 and $300 depending on brand and length.
• Insurance: EV insurance costs will vary but are generally like petrol or diesel vehicles in Australia.

Compare vehicles and fuel costs on the Australian Government’s Green Vehicle Guide.

• Alternating Current (AC) electricity is supplied to households from the electricity grid. Direct Current (DC) electricity is energy from batteries.
• AC charging is slower and typically used at home.
• DC charging is faster and commonly found at faster public-charging stations.
• Your vehicle’s onboard charger converts AC to DC when charging at home or with slower kerbside chargers.

• Most EVs can travel between 300 and 600 km on a single charge under standard testing conditions.
• However, real-world ranges may be up to 30 per cent less due to factors like driving speed, hilly terrain, rain and wet roads, headwinds and when using the heater or air conditioning.

• All EVs use lithium-ion battery cells, which include chemistries such as lithium–ferrous–phosphate (LFP) and nickel–manganese–cobalt (NMC).
  • LFP batteries: Renowned for high safety and longevity, lower cost and lower environmental impact.
  • NMC batteries: Common in high-performance EVs and motorcycles that require high energy density.
• With modern battery thermal management systems, both chemistries deliver over 3,000 full charge cycles, but the choice comes down to cost and performance needs.
• Ongoing research and development in EV battery technology will see new and improved batteries compared to what we have today. Emerging EV battery innovations include sodium-ion batteries, solid state batteries and lithium-sulphur batteries. 

EV batteries typically last a minimum of eight to 15 years, depending on usage and care. You should read and follow the manufacturer’s recommendations for maintaining battery health.

General guidance includes:

• Avoid direct sun and excessive heat exposure. The optimum performance for most lithium-ion batteries is between ambient temperatures of 15°C to 35°C, so simple steps like parking under a tree or in the shade during extreme weather conditions will help maintain battery health.
• Try to avoid leaving the battery at high states of charge for a long time.
• Slow charging causes the least stress to a battery; however, recent data indicates fast charging can have very minimal negative impact given thermal management in modern battery management systems.
• For NMC batteries when fast charging, charge up to 80 per cent of the battery capacity rather than all the way to 100 per cent if possible. 

It’s important to do your own research about EVs and choose the vehicle that is right for you.

Check the following resources:

• The Electric Vehicle Council provides advice about EVs, including which EVs are available in Australia and how to charge them.
• The Vehicle Emissions Star Rating online tool and FAQ provides a valuable way to compare the emissions of different vehicles, whether electric, hybrid, diesel or petrol powered.
• Local automotive clubs such as the RAC have information about which EVs are available, and what to consider when buying an EV.
• The Australian Electric Vehicle Association is a user-community which has been helping Australians understand EV technology since 1973.