Is now the right time to buy an EV?

From electric vehicles' (EV's) higher purchase price, to how you’ll charge one, if they're really the right thing to do for the environment, and whether there's a model that fits your lifestyle is currently available in Australia or not, there is a lot to think about.

The fact is, there has never been a better time to buy an EV. There is more choice, more financial incentives to buy, and more EV charging infrastructure than ever before.

And it’s true that EVs are a new technology that will – as smart LED TVs did to cathode ray TVs – leave internal combustion cars inevitably in the dust, so to speak.

EVs accounted for just 3 per cent of all vehicle sales in 2022 but, in December, accounted for 5.8 per cent. In March 2023, they accounted for 6.8 per cent. The chart below shows the rapid increase in EV uptake from 2011-2022.

The average Australian driver buys a new car about every 10 years according to government data, so by the time a new car bought now is sold to its next owner, the number of EVs on the road will have shot up even further.

First, we must clarify that these figures refer to battery-electric vehicles that do not have a hybrid powertrain.

Also known as BEVs, they differ from plug-in hybrids that can be charged at the powerpoint but also have a petrol engine, and hybrids (such as a Toyota Prius) that cannot be plugged in at all, and must always have petrol in the tank.

We look at the factors to consider when choosing to go fully electric, including the state of Australia’s EV market and charging networks, as well as financial considerations.

The state of Australia’s EV market

Two factors that have historically held people back from going electric are the amount of model choice, and price.

When EVs first arrived in Australia, there were just three models on the road - the Mitsubishi iMiev, the Nissan Leaf and less than a handful of Tesla Roadsters.

The Tesla Model S arrived in 2014 along with the BMW i3, but sales were slow and both the iMiev and Leaf were pulled from the market in 2013 and 2016 respectively. Very little else arrived until 2018 with the introduction of the Tesla Model X, Jaguar i-Pace and Hyundai Ioniq fastback.

The Ioniq fastback was the first EV in Australia priced below $50,000, and all other EV models on the market fell well outside the budget of most families.

A lot has changed in just five years, however. As of 2023, there are now around 50 all-electric vehicle models on the Australian market, offering body styles from hatchbacks to sedans to SUVs.

Prices now start from under $45,000, and there are numerous financial incentives to buy EVs at state and federal levels, helping to tackle affordability.

A change in government has also brought a new, encouraging stance on EVs which in turn has brought more certainty to carmakers, enabling them to secure new models and inventory from overseas HQ.

Within the next 12 months we can expect to see many more new models - in particular more hatchbacks - and it is even possible there may be some that crack through the $40,000 price mark.

And remember - because BEVs don’t have an engine under the bonnet, they usually have a lot more leg room even in smaller body styles.

EV charging networks

Australia's electric vehicle charging network is very much in growth stage. Government funding is helping organisations and companies like the NRMA to expand charging infrastructure required to support the growing number of EVs on Australian roads.

While many people will find it very convenient to charge EVs at home, there are still some challenges that are being solved. These are helping strata management navigate the process of providing AC chargers to apartment dwellers, and installing DC chargers along less travelled routes.

Australia has approximately 2,500 public charging stations in cities and along important highways to support long-distance travel. It is easy to travel in an EV from Adelaide and all the way up the eastern seaboard to Cairns.

The distance between stations varies but most are 150-200 kilometres apart. There have been some challenges with reliability of chargers. The NRMA is working with charging equipment suppliers to improve this.

Plugshare is an excellent resource for finding public EV chargers, and can be used to “check in” to let other EV drivers know how long you’re charging for, or whether you’ve encountered any faults. The NRMA also updates Plugshare to let drivers know of any known faults.

Financial considerations when buying an EV

Although EVs still carry a higher sticker price, it’s important to also consider the following factors when considering buying an EV:

• Fuel savings
• Government EV rebates and other incentives
• Servicing and maintenance costs
• Insurance costs
• Resale value

Electric car fuel savings 

When you compare the prices of certain all-electric models to similarly specified hybrid models, the gap is narrowing.

A recent comparison of the RWD Tesla Model 3 to the Toyota Camry SL hybrid (a variant which shares similar specifications) showed that when fuel savings and rebates were taken into account, the EV was just $3,600 more expensive.

You can compare your own fuel savings using NRMA's EV Cost Calculator.

Government EV rebates and other incentives

Firstly, check if your state is offering any EV incentives. At the time of writing, NSW, Victoria, Queensland and South Australia all offer a $3,000 rebate for new EVs under a certain price point. Some states also offer stamp duty and registration exemptions or discounts.

There is also a lower Luxury Car Tax for EVs that sell above a certain threshold.

You can check NRMA’s handy incentives list here for more information.

EV servicing and maintenance

Generally, EVs cost less to maintain and service. Electric drivetrains are far less complex than internal combustion engines. As a result less can go wrong and there is no need for oil changes.

Legacy carmakers still tend to stick to a servicing schedule but the frequency tends to be less often. An example is MG’s servicing schedule for the ZS EV versus the ZS. The ZS EV requires servicing every 40,000km while the ZS requries servicing every 10,000km.

EV insurance costs

EVs at this point in time tend to be more expensive to insure than combustion engine cars.

According to the Insurance Council of Australia, this has historically been because of:

• The higher purchase price of EVs
• The higher cost of parts like EV motors and batteries needed to repair them
• A nascent supply chain for EV parts increasing import costs
• A lack of trained technicians
• A fledgling battery recycling and disposal industry 

As of December 2022, EV insurance averages at 18 per cent more expensive than combustion engine equivalents. As EV technology and supply chains improve, insurance costs are also likely to reach price parity.

Resale value of electric cars

Several factors affect the resale value of any vehicle. These include model availability, brand desirability and reputation, and improvements in technology.

Of course, these factors affect combustion engine vehicles also, but in the case of EVs it is the high price of batteries which is most likely to bring down new EV prices, thus affecting resale values.

If you buy an electric car now, you can be sure that battery technology will improve and manufacturing costs will reduce - but only once lithium and other critical mineral supply ramps up enough for the predicted growth in global EV production.

As with smart TVs once they fully penetrated the market, prices will continue to come down.

Whether you buy an EV now or later, the result is the same: The price will tend to continue lowering until full market penetration is reached, which in many countries including Australia is likely still decades away.